Before cryptocurrencies started to be widely used for speculation, they were first of all meant to be an unstoppable method for people to control their own money. A new example that this is still a needed use case comes from the U.K., where Iranian students have to bypass the banking system which they can no longer access due to sanctions.
University Students Turn to Bitcoin
Back in early November, the U.S. successfully pressured the banking transactions network Swift to cut Iran off from the global financial system. This is now reportedly causing Iranian citizens studying at universities abroad to turn to cryptocurrency in order to be able to fund their tuition.
Maziar Bahari, the editor of a news portal for Iranian citizen journalists based outside the country, Iranwire, explained the situation to the British media. “They are using Bitcoin and other cryptocurrencies in order to get money,” Maziar told The Guardian newspaper. Adding that he heard that “many” students of the University of Cambridge specifically are having issues securing banking services in the U.K.
The British newspaper also reports that the students are advised by some U.K. institutions, such as the University of Reading, to fly back to Iran and bring large amounts of fiat cash notes to pay for their classes. This can bring its own set of legal problems for the students as they will try to cross international borders with the money, but the old established academic payment system appears to have no other option for them.
Iranian Sanctions and Crypto
Besides individual Iranian citizens, such as students studying abroad, the government of the Islamic Republic may also be using cryptocurrency to dodge economic sanctions. However, this appears to be a very small phenomena so far, as Fincen claims that “since 2013, Iran’s use of virtual currency includes at least $3.8 million worth of bitcoin-denominated transactions per year.”
The country might soon follow a similar path as Venezuela, launching a national digital coin in order to try evading sanctions on a larger scale. If or when this occurs, the government of Iran can count on the support of experts from Russia. Meanwhile, international crypto exchanges have already stopped serving Iranian clients to avoid the risk of violating U.S. sanctions.
Is this going to bring more pressure on crypto exchanges to block users from sanctioned countries? Share your thoughts in the comments section below.
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