News ID: 255695
Published: 0350 GMT July 12, 2019

Russia, China, Iran, Venezuela developing crypto to challenge US financial control: Study

Russia, China, Iran, Venezuela developing crypto to challenge US financial control: Study

A new report by the American Foundation for Defense of Democracies (FDD) said the US’ geopolitical adversaries are deploying blockchain technology to help avoid sanctions and counter US financial power.

According to the FDD, with the increase of adoption of cryptocurrencies around the world, efforts are underway to build new systems for transferring value that work outside of conventional banking infrastructure, RT wrote.

Governments in Russia, China, Iran and Venezuela are experimenting with the technology that underpins the crypto market, said the report. They are prioritizing blockchain technology as a “key component of their efforts to counter US financial power.”

“Russia, Iran, and Venezuela have initiated blockchain technology experiments that their leaders paint as tools to offset US financial coercive power and increase sanctions resistance. China is also wary of US financial power and the ever-present threat of sanctions against Chinese officials,” the study finds.

The efforts of the four nations go beyond mere sanctions evasion, according to the report, which said that they “seek to reduce the potency of unilateral and multilateral sanctions by developing alternative payment systems for global commerce.”

The report noted that the US position of influence is not necessarily permanent.

“Technology has created a potential pathway to alternative financial value transfer systems outside of US control. The target timeline may be two to three decades, but these actors are developing the building blocks now. They envision a world in which cryptocurrency technology helps them eclipse US financial power, much the way that the dollar once eclipsed the British pound.”

The governor of the Central Bank of Iran (CBI) announced on Wednesday that Iran is planning to authorize cryptocurrency mining despite the fact that there is no rule allowing its legal trade in the country. 

Abdolnasser Hemmati said that the government had approved parts of an executive law which would allow cryptocurrency mining, an activity which has become increasingly popular in Iran over the past months mainly due to the relatively cheap prices of electricity.

Hemmati said the government had two main conditions for authorizing people to mine digital currencies like bitcoin.

“Mining of the international digital currencies should be done based on the price of electricity for export,” said Hemmati, adding, “What’s more important is that these mined currencies should be fed back to the national economic cycle.”

The official said the CBI will not allow any currency in Iran whose values are decided by the price of the national currency rial or gold or other assets.

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