Iran has made its first official import order using cryptocurrency, in a move that could allow the Islamic Republic to circumvent US sanctions that have crippled the economy. The order, worth USD 10 million, was a first step towards allowing the country to trade through digital assets that bypass the dollar-dominated global financial system and to trade with other countries similarly limited by US sanctions, such as Russia.

The agency didn't specify which cryptocurrency was used in the transaction. As officials announced, they expect that by the end of September, the use of cryptocurrencies and smart contracts to be widely adopted in foreign trade with their partner countries. The US imposes an almost total economic embargo on Iran, including a ban on all imports including those from the country's oil, banking, and shipping sectors.

Iran needs crypto In 2021 4. 5% of all Bitcoin mining was taking place in Iran, partly because of the country's cheap electricity. The mining of cryptocurrency could help Iran earn hundreds of millions of dollars that can be used to buy imports and lessen the impact of sanctions.

However, cryptocurrencies such as Bitcoin are highly volatile, making them impractical for large-scale payments for now. The European Union on Monday said it put forward a text to revive the 2015 Iran nuclear deal as four days of indirect talks between US and Iranian officials wrapped up in Vienna. Under the 2015 agreement, Iran curbed its nuclear program in return for relief from US, EU, and UN sanctions.

But former US President Donald Trump reneged on the nuclear deal in 2018 and restored harsh US sanctions, prompting Tehran to start violating the agreement's nuclear limits about a year later. Is crypto useful on a larger scale? In 2021 El Salvador also adopted Bitcoin as legal tender, though the project has been beset by public scepticism amid tumbling crypto prices. The El Zonte Bitcoin Beach has accepted Bitcoin as a form of payment even before the country made Bitcoin legal tender.

Since then, other Latin American countries such as Argentina, Panama, and Brazil have started to explore the regulation of digital assets. However, El Salvador’s economy is struggling in the context of the recent crypto crash. CNBC and other financial experts from CNN, Mashable, or Coindesk, argue that the government’s investment in Bitcoin has not paid off, quite the opposite, as Bitcoin adaptation nationwide isn’t making good progress.

One could argue thus that relying on crypto payments internally or cross-border might still be a matter for the future, as the risks are high now. This has prompted countries such as Honduras to launch cautionary campaigns alerting their citizens that crypto payments are mostly not reliable yet. .