Following the collapse of the Nuclear Deal, Iranians are turning to cryptocurrencies to send cash out of the country in a new form of digital capital flight
Amid sanctions fears, Iranians have reportedly spent over $2.5 billion on cryptocurrencies to get their cash out of the country in a new form of digital capital flight.
The Iranian version aired on state-run media was buried at the bottom on a long discourse on cryptocurrencies, and downplayed as to its significance, but it comes as the Iranian rial plunges to new lows against the U.S. dollar, the climax of which has been Trump’s formal announcement of a withdrawal from the nuclear deal.
Shortly after Trump’s announcement last week, the rial nose-dived to 65,000 to 1 US dollar, down from 57,500 rials to 1 US dollar at the end of April, and 42,890 at the end of last year.
Since April, Iran has been attempting to get in front of a sell-off, first unifying official and free-market exchange rates and freezing the rate at 42,000, while banning all other trading in the currency, under threat of arrest.
The rial is expected to dive further on news Tuesday that the U.S. has sanctioned Iran’s central bank head.
Late last week, the U.S. levied sanctions on a financing network, accusing the Iranian central bank of helping funnel U.S. dollars to its Quds Force elite military unit, which is on a U.S. blacklist.
This was followed by another move on Tuesday that saw terror sanctions slapped on the head of the Iranian central bank, Valiollah Seif, whom Washington has accused of secretly funneling millions of dollars through an Iraqi bank to help Hezbollah. The sanctions also include bank senior official Ali Tarzali. Both have been listed as “specially designated global terrorists”.
At the same time, Iranian government moves to head off a currency crisis could lead to further capital flight via cryptocurrencies.