Numerous countries faced sanctions imposed by the United States and parts of Europe. When a country is sanctioned, it often cannot process international transactions. For instance, a country sanctioned heavily by the US cannot deal with US-based companies. Transactions with certain countries become impossible, and this can impact a nation in countless ways. Virtually all consequences of sanctions are negative and devastating.
Russia And Iran Face Major Sanctions Right Now
US and European sanctions hit Russia and Iran the hardest today. Deteriorating relations between Russia and Iran with the rest of the world have led to heavy sanctions. Both nations face a hostile international climate, which impacts each country’s economy. For better or worse, these sanctions won’t be lifted anytime soon. Neither the US nor its allies have made the slightest hint of easing these sanctions.
A Potential Workaround Available To Russia and Iran
Iran officials recently met in Russia to discuss a potential solution to sanctions. Apparently, both countries want to utilize cryptocurrencies to improve their situation. US-led sanctions mean that transactions involving the US dollar are not possible. Cryptocurrencies are decentralized, meaning transactions can’t be stopped by a central authority. The use of cryptocurrencies would provide some anonymity as well.
Bitcoin or Ethereum would allow Russia and Iran to navigate the international landscape with ease. Sanctions would no longer hinder the countries’ ability to start and complete transactions. In fact, banking would become easier than ever for both nations, and existing payment processors and banks would hold no power over them. Cryptocurrencies could even replace payment systems like Venmo and Paypal.
Of course, neither company can do business in or with Iran or Russia today. The same applies to hundreds of other United States and European businesses. Russia and Iran want to transact business on an international scale at their leisure. Bypassing traditional payment infrastructure is more than possible through cryptocurrencies. Recently, Venezuela released its own cryptocurrencies to bypass US sanctions.
Venezuela’s Petro cryptocurrency didn’t solve the country’s problems. Then again, Russia and Iran hold the resources necessary to make cryptocurrencies work. Neither country needs to create its own cryptocurrency in order to bypass sanctions. While such a partnership would cause headaches for US officials, cryptocurrencies only stand to benefit from more widespread adoption, especially by two large nations.
For now, Iran and Russia only have an agreement to explore the benefits of cryptocurrencies. A true plan for using them to bypass international sanctions could come within months, though.