According to Vitalik Buterin, mass adoption should be the focus of the industry considering that it can help crypto markets in the long run. But what if states decide to dabble in cryptocurrencies? Is this a good or a bad thing?
Iran’s National Cyberspace Center revealed that there is already a draft of the state-backed cryptocurrency project. Based on the article released about the state-backed digital currency, the development of the cryptocurrency was instructed directly by President Hassan Rouhani.
According to Saeed Mahdiyoun who is the deputy director who is in charge of drafting the regulations for Iran’s Supreme Cyberspace Council, he has revealed that a national cryptocurrency is being pushed mainly by Iran’s cyberspace authority. What this will do according to Mahdiyoun is to remove existing uncertainties surrounding the volatile cryptocurrencies. The Central Bank of Iran is set to make an official stance by the end of September.
Banned Crypto Operations
Crypto-related operations are banned by Iranian banks and credit institutions. There are many reasons for this move. One, you have the money laundering concerns raised in December 2017. Also, you have the dwindling value of Iran’s currency. There is a possibility that Iranians are going to rely on cryptocurrencies in order to protect their assets.
And more importantly, the state-backed cryptocurrency was designed mainly in order to avoid upcoming US sanctions. US President Trump decided to pull-out of the Iran Nuclear deal and has threatened Iran of sanctions. With a state-backed cryptocurrency, this can help “facilitate the transfer of money” to and from “anywhere in the world”.
Earlier in the month, there have been reports that there are a growing number of cases of Iranian crypto ransomware. According to global management consulting firm Accenture, the ransomware “could have been created by government-backed actors or Iranian criminals”.
There were five new types of ransomware that have been discovered by Accenture. Some of these ransomware were asking a tremendous amount of crypto ransoms. For instance, “WannaSmile” which is a zCrypt variant discovered in November 2017 asks for 20 Bitcoin payment as ransom. Also, the “Black Ruby”, targets computers and infects the machines with a Monero miner. The ransom for the Black Ruby is $650 to be paid in form of Bitcoin.
Iran is in the same situation as Venezuela at this point. Venezuela is dealing with hyperinflation, not to mention sanctions from both the US and the European Union. Experts are predicting that inflation in the country is about to reach 1 million percent soon.
Venezuela’s attempt to salvage the economy is by introducing the first national cryptocurrency in February. It is an oil-backed cryptocurrency. And now, Venezuela even revealed that it is having a new currency that is backed by Petro.
Until today, regulators don’t have a unified approach to cryptocurrencies. There are countries such as Venezuela and Iran that have considered blockchain technology as their last resort in solving economic and political problems within the country. Also, there is China that has tightened its rules when it comes to its crypto-activity ban. China even banned hotels and malls from hosting crypto-related events.