Iran could become the first country after El Salvador to legalize digital currencies as legal tender. According to local reports, the country will integrate the digital currency into its central bank's payment platform, but only for settling international trade transactions.

The Central Bank of Iran has partnered with the country's trade ministry to link the former's payment platform with a trading system that will allow businesses to settle transactions with global trading partners using the digital currency, Mehr News Agency reported.

Alireza Peyman-Pak, deputy minister of industry and trade, said the integration will open up many new opportunities for Iranian businesses. Peyman-Pak, who also heads the country's trade promotion organization, said the new payment mechanism will be completed in the next two weeks.

"We are finalizing the mechanics of how the system will work. This should open up new opportunities for importers and exporters to use cryptocurrencies in international transactions," he said.

Peyman-Pak believes that the Iranian government must not ignore the huge opportunities presented by digital currencies. The country already has a large number of block reward miners, some of whom have moved there after leaving China. However, they have had to deal with power shortages over the past year after the government cut off energy supplies to them amid a supply shortage.

Miners are currently going through such a period after national grid operator Tavanir cut off energy to miners in December 2021, Tavanir said, adding that demand for electricity has risen sharply as more people heat their homes during the ongoing winter months.

Peyman-Pak breaks down how the new system will work, "All economic players can use these cryptocurrencies. A trader takes away rubles, rupees, dollars or euros, and he can use them to get a cryptocurrency like Bitcoin, which is a form of credit that can be passed on to the seller or importer. […] Since the cryptocurrency market is done on credit, our economic participants can easily use it and use it extensively."

Although the government has not mentioned it directly, Iran will rely on digital currencies to escape the economic sanctions that have been imposed on the country for years.

In the past, the Middle Eastern country's leading leaders have called on Iran to use digital currencies as a way to evade sanctions, which hinders the country's ability to compete globally. In 2020, then-Iranian President Hasan Rouhani even called on the Islamic country to launch a Muslim digital currency to counter U.S. economic dominance.

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