The Iranian government and its local authorities are preparing to adopt Bitcoin and cryptocurrencies by establishing a robust infrastructure, regulatory frameworks, and ecosystem for businesses, investors, and users.
Amir Hossein Davaee, Iran’s Deputy Minister of Information and Communication Technology, told local newspaper Shargh in an interview:
“The ministry of communications and information technology has already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country. Arrangement are being made with the related organizations to put together the infrastructure as early as possible.”
As noted by some of the most highly regarded investors in the global financial market including billionaire investors Peter Thiel and Mike Novogratz, over the past two years, Bitcoin has rapidly evolved into a safe haven asset and a robust store of value. Due to the rising demand for Bitcoin as digital gold, the price of Bitcoin increased from below $1,000 to $6,300 within the past 10 months.
With international sanctions and trade restrictions established by the US, Iran is currently struggling to deal with the devaluation of the Iranian Rial, which has drastically declined in value since 2013. Consequently, a growing number of citizens, residents, and businesses have been seeking for robust stores of value and currencies like Bitcoin, that can be used as an alternative to the Iranian Rial, especially for international payments and remittances.
In most leading economies and regions such as the US, Japan, South Korea, and Hong Kong, the regulatory frameworks for Bitcoin and cryptocurrencies have been strictly enforced, to provide a better environment for businesses and investors. Most recently, Japan imposed a national licensing program to provide cryptocurrency exchanges the status of a recognized and legalized financial service provider in the country.
Within months after the Japanese government’s implementation of practical regulatory frameworks around cryptocurrencies, the Japanese Bitcoin exchange market overtook the US to become the largest Bitcoin market, with over 65 percent of the market share.
Given Iran’s weak fiat currency, underbanked population, and rapidly evolving technology industry, practical regulatory frameworks introduced by the Iranian government could allow Iran to become a relatively large Bitcoin market in the long-term. The Philippines has recently become a major bitcoin market as well, after the government officially recognized Bitcoin as a remittance method.
In February, the central bank of the Philippines announced:
“The Bangko Sentral does not intend to endorse any VC, such as Bitcoin, as a currency since it is neither issued or guaranteed by a central bank nor backed by any commodity. Rather, the BSP aims to regulate VCs when used for delivery of financial services, particularly, for payments and remittances, which have a material impact on anti-money laundering (AML) and combating the financing of terrorism (CFT), consumer protection and financial stability.”
It is becoming evident that both leading and developing economies are preparing to adopt Bitcoin and cryptocurrencies in the long-term, to address the growing demand from investors and businesses.