SWIFT, a platform which facilitates cross-border payments globally, has once again disconnected the Iranian central bank as Iran turns to crypto to bridge the gap.
Iran was reconnected back to SWITF’s network in 2016 after four years of being in the dark of international money transfer and after the U.S. lifted the economic sanctions hovering over the country.
But on March this year, President Donald Trump led the United States in withdrawing from the agreements signed in 2016. This threw Iran back to an economic sanction which took effect in August this year.
To further enforce the sanction, SWIFT has now disconnected the Iranian central bank and other financial institutions in the country. In effect, this prevents Iranian traditional financial firms from receiving or sending money abroad. Being one of the largest oil producing countries, the sanctions will leave huge dent its economy, in the short term.
To counter the effects of the disconnection, Iran will now explore the advantages of a central bank issued digital currency to not only make international payments but also for domestic usage.
“The national cryptocurrency has been developed… at Central Bank of Iran’s request to utilize new technologies in expanding banking system services. The national cryptocurrency is issued by the central bank and can be used in a distributed and one-to-one framework for transferring without any institute’s interference,” reported Ibena.
According to Max Keiser, a stockbroker, the disconnection of the Iranian banks from SWIFT will ‘expedite global de-dollarization.’ Keiser continued to note that the move by the U.S to push Iran away from global payments “will only force other countries to come up with an alternative, and stockpile gold” which will reduce the dependence on the U.S dollar
As Iran turns to crypto to bridge the gap left by SWIFT, do you think other countries like China and Russia will soon have a working crypto to reduce their dependence on the U.S. dollar?
Let us know your thoughts in the comments section below.