Venezuelan President and Palestinian President shake hands during a press release announcing the creation of a binational fund in Petro Credit: Carlos Garcia Rawlins / Reuters
Carlos Garcia Rawlins / Reuters

Russia and Iran to Develop Own Cryptos to Reduce USD Dependence

Virtual currencies have reached an important number of citizens all over the world. They were able to help people to be more independent and have more freedom; with virtual currencies they were able to be the real owners of their funds. But some countries, including Russia, Iran and Venezuela, have been developing virtual currencies so as to avoid US sanctions, and more important, to reduce USD dependence.

Russian CryptoRuble, Venezuelan Petro, and Iranian…

Russia has been one of the first countries to propose the creation of its national virtual currency, the CryptoRuble. It was expected to work as a virtual currency to process transactions, speed up international payments, reduce costs and…yes, avoid United States possible sanctions.

The same happens with the Venezuelan Petro, which has gathered important attention all over the world, and investors trying to place their funds in one of the first ICOs conducted for a national virtual currency.

And Iran, which is now discussing with the United States about its nuclear plan, could be ready to develop its own virtual currency as well.

But what do all these countries have in common? Why are all of them so obsessed with virtual currencies? Is there any economic reason behind that?

Well, there are several explanations about why they want to build their tokens. But they clearly differ with the intentions that other countries may have regarding national virtual currencies, like Estonia, the United Kingdom (UK), or Canada.

The three countries mentioned at the beginning have something in common. All of them are against the United States and western states in different fields. And this is not just a mere opinion, but these are facts. Russia accuses the United States of being too invasive with the NATO near its country. Iran is negotiating a very controversial nuclear deal, and Venezuela has taken its country from the 4th place in income per capita back in 1980’s to one of the poorest in the world with its radical policies.

All of these three countries have also been sanctioned by western countries. Funds from important leaders and businessman have been blocked and political leaders are not welcomed in other territories.

National Cryptocurrencies are one of the easiest and most innovative ways to avoid these financial sanctions and reduce dependency on the USD dollar. Imagine Venezuela, Iran, Russia and other nations exchanging goods and services with a cryptocurrency that does not depend on the dollar. They would be able to avoid sanctions imposed by other countries.

While launching the Petro, Venezuela’s President, Nicolás Maduro, commented:

“Venezuela announced the creation of its own cryptocurrency. It will be called ‘Petro’ […] This will let us move towards new ways of international financing in order to allow the social and economic development of the country.”

It is clear that as cryptocurrencies helped individuals to be independent from states and governments, they are also helping other countries to avoid sanctions, get financed in the market, and keep their commercial activities with other countries from all over the world.