Using crypto in remittance and the international-trade market is one of its essential use cases. Since it doesn’t need banks or 3rd party involvements, countries do not even need to be part of the SWIFT banking network to transact smoothly. And I believe the pillar has been set for the gradual growth of crypto use in the remittance and international trade market as Iran places its first import order worth $10 million by paying with crypto.
Iran pays with crypto for imports
The country has paid with cryptocurrency worth $10 million to pay for goods they are importing to the country. Iran’s head of the Trade Promotion Organization, Alireza Peymanpak, tweeted that by the end of September, they will be all set for the use of crypto and smart contracts for trade with selected countries. They have finally taken this bold decision after thinking about it for a year. The Central bank of Iran allowed licensed banks and crypto exchanges in the country to pay for imports using crypto in 2021.
Iran has been positive about its crypto approach for quite a while. They have legalized Bitcoin since 2019, which has made the industry boom in the country. They have already provided over 1000 licenses for Bitcoin mining since Jan 2020. The authorities have made it clear that miners need to get licenses to operate in Iran.
This is because mining consumes a lot of electricity, and if miners use household energy supplies to mine crypto, the energy usage will be very high, resulting in electricity shortages and blackouts. So, it is for the benefit of the people themselves. This also means the government won’t have any issues if miners use renewable energy resources for mining.
What makes crypto attractive for international trade and remittances?
If a country is not part of the SWIFT banking network, then it will be cumbersome for them to do business with nations part of it. It also means countries under this network are always under the control of the US because they can levy sanctions anytime if you don’t agree with them. The charges of the banks are also exorbitant for cross-border transactions. So, crypto (Bitcoin) has become quite attractive for international trade and cross-border remittances.
What are your thoughts as Iran places its first import order by paying with crypto? And do you think this will start a flurry of international transactions using crypto? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Coinbase posts a loss of $1.1 billion in Q2 2022.
