Iranian cryptonauts can’t use the P2P cryptocurrency exchange platform Localbitcoins.com anymore. At least not from within their own country for now. The Iranian section in the site says that the platform is currently not available. This is happening after substantial trading volumes occurred in Rial (Iran’s national fiat currency, IRR) materialized, which had been growing in value over the previous weeks.
The Helsinki-based trading platform has offered no explanation about why it’s decided not to serve Iranian residents anymore.
Iran, however, has tense diplomatic relations with the West and tensions have been growing over the last few days between the Middle Eastern country and the USA. The US military placed the soldiers in the region on high alert. The US State Department evacuated nonemergency employees. Donald Trump’s tweets and interviews on the subject aren’t lessening the stress either. Economic sanctions are also in place, and they could be the reason behind Localbitcoins’ otherwise strange behavior.
Bitcoin as a solution for economic sanctions
Economic sanctions and trade bans against Iran were imposed decades ago, in 1979. Many United Nations members have joined them. Cryptocurrencies, however, have given Iranian residents a chance to work around the sanctions and use Bitcoin and other digital assets to acquire services and products overseas without the need for USD or conventional trading mechanisms. This shouldn’t be a surprise at all, since that kind of use case is precisely one of the reasons why Bitcoin came into existence, even if, in this case, it seems to be on the rebellious side of things.
Trading data from Coin Dance shows that Bitcoin trading volumes out of Iran were indeed quite substantial until Localbitcoins shut down its Iranian users. The last week produced the highest volumes seen in the BTC/IRR trading pair since the 2017 bull market.
Those volumes were trending upwards significantly until the platform decided to stop service for the Islamic nation. Users will be allowed to withdraw their digital coins, but not to use them for trading in the platform. At least not until further notice.
Digital asset adoption has been faster in Iran than in the rest of the world, probably because of the economic sanctions. Also, the country’s government and central banks have made no attempts so far to bring forth any regulation. That suggests that they’re quite happy to let people buy, sell and trade BTC as it opens a trading gateway to the rest of the world at a time in which most other options are closed.
A pizza place in Tehran reports that,
“We have up to 200 people paying with crypto each month, mostly consisting of large groups who throw parties at the restaurant to use the discount.”
The Iranian interest in cryptocurrencies surged after Donald Trump announced his intention to break his country’s commitment to the Iran nuclear deal and to impose even worse economic sanctions.
It also happens that electricity is very cheap in Iran because the country is very rich in oil. The lower power costs make it convenient for locals to mine Bitcoin and other currencies. Even Chinese miners are moving to Iran so they can take advantage of the cheaper environment.
Disclaimer: Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.