US legislators have implemented further sanctions on Iran’s financial institutions. Their goal is to fight the national digital currency planned by Iran.
The rules were voted in the House of Representatives on December 17. The “Iran Illegal Financing Act” calls for sanctions to be imposed on the Iranian financial sector, with particular emphasis on using the national cryptocurrency. The Act explicitly prohibits transactions related to the Iranian digital currency. It also forbids possession or transfer of the Iranian digital coin. The Act also calls for a report to Congress on Iran’s progress in the development of a sovereign digital currency.
Sanctions at a new level
The US government introduced sanctions against Iran in connection with its nuclear program in 2005. The sanctions affected the country’s financial sector. They were lifted in 2015 after the country agreed to adapt its nuclear program to the standards set by the International Atomic Energy Agency in the Joint Comprehensive Action Plan (JCPOA). However, in May 2018 US President Donald Trump announced that America would withdraw from the JCPOA, which was negotiated under the rule of his predecessor, President Barack Obama. Then the sanctions were restored.
Today, many Iranians are turning to cryptocurrencies to circumvent sanctions. In May this year Mohammad Reza Pourebrahimi, head of the parliamentary committee on economic affairs, described cryptocurrencies as a promising way for Iran to avoid transactions in US dollars, as well as possible replacements of the SWIFT interbank system.