Economic Mismanagement Increases Crypto Use in Iran
January 25, 2019 11:07 am
Iran is currently facing an economic fiasco, and its government is planning to redenominate its currency, as reported by a local media. Iran’s central bank governor Abdolnaser Hemmati said,
“A bill to remove four zeros from the national currency was presented by the government by the central bank yesterday and I hope this matter can be concluded as soon as possible.”
The strategy of redenominating currency has been adopted by many governments, in the attempt to rescue their economy. For example, Brazil, when its currency was devalued by over 30 percent per month in the 1960s and 70s, the country went through a similar procedure of currency redenomination. And Zimbabwe, followed suit, during the crisis of hyperinflation.
The Iranian government has been considering the idea of debasing the rial for a long time. Last year was particularly a tough one for the country, as the national currency lost 60 percent of its value.
The United States’ reimposing sanctions on the country following the pullout from the 2015 nuclear deal with Tehran, was one of the causes of the drop in Iran’s currency value. In addition, years of negligence in managing country’s economy has made matters worse.
In the face of such financial atrocities, the nation has opted for the adoption of cryptocurrency as its last resort. Many Iranians believe that the usage of bitcoin and altcoins, which is already increasing in the nation, will continue to rise.
Iran’s economic catastrophe has infuriated many citizens, who have started protesting due to the growing financial turbulence. The country of 80 million has been bifurcated into categories of people using bitcoin, and people who use fiat-currency out of necessity.