Dollar-Less Iranians Discover Virtual Currency
29
November, 2012
Under
sanctions imposed by the U.S. and its allies, dollars are hard to
come by in Iran. The rial fell from 20,160 against the greenback on
the street market in August to 36,500 rials to the dollar in October.
It’s settled, for now, around 27,000. The central bank’s fixed
official rate is 12,260. Yet there’s one currency in Iran that has
kept its value and can be used to purchase goods from abroad:
bitcoins, the online-only currency.
Created
in 2009 by a mysterious programmer named Satoshi Nakamoto, bitcoins
behave a lot like any currency. Their value is determined by demand,
and they can be used to buy stuff. Bitcoin transactions are encrypted
and handled by a decentralized global network of tens of thousands of
personal computers.
Merchants around the world accept the currency,
from a bakery in San Francisco to a dentist in Finland. Individuals
who own bitcoins and wish to exchange them for physical currencies
like euros or dollars can use exchange sites such as
localbitcoins.com, a Finland-based site founded by Jeremias Kangas.
“I believe that bitcoin is, or will be in the future, a very
effective tool for individuals who want to avoid sanctions, currency
restrictions, and high inflation in countries such as Iran,” Kangas
wrote in an e-mail.
The
advantage for Iranians is that bitcoins can be swapped for dollars
that can then be kept outside the country. Another plus: Regulators
can’t easily track the transactions, since bitcoins aren’t issued
from a central server. Bitcoin users can conduct business on virtual
private networks, which hide customers’ identities.
At
online store coinDL.com, shoppers can use bitcoins to buy Beyond
Matter, the latest album from Iranian artist Mohammad Rafigh. Anyone
in the U.S. downloading songs, which fetch .039 bitcoins or 45¢
each, risks violating U.S. sanctions. That doesn’t bother Rafigh,
who’s studying computer engineering as well as playing music.
“Bitcoin is so interesting for me,” Rafigh wrote in an e-mail.
“I
wish the culture of using digital money spreads all over the world,
because it does not have any dependency on anything like politics.”
Rafigh has translated some bitcoin software into Farsi for his
friends. “I love Iran, and if bitcoin is good for me, it can be
good for more Iranians like me.”
Iranian-American
bitcoin consultant Farzad Hashemi recently traveled to Tehran and
talked up bitcoin to his friends. “They are instantly fascinated by
it,” he says. “It’s a flash for them when they realize how it
can solve their problems.” Iranians working or living abroad can
send bitcoins to their families, who can use one of the online
currency matchmaking services to find someone willing to exchange
bitcoins for euros, rials, or dollars. Bitcoins are useful to
Iranians wishing to move their money abroad, either to children
studying in Europe or America or simply to stash cash in a safe
place.
As
the value of the rial plunges, many Iranians are trying to acquire
foreign currencies. “We have no idea what will happen,” says
Amir-Hossein Madani, who says he’s traded tens of millions of
street market dollars in Tehran over the past two years. “These
days prices change every 10 minutes.”
The
uncertainty has led some Iranian software developers to ask clients
to pay them in bitcoins. “Anyone with a computer is able to own,
send, and receive them. You can be at an Internet cafe in Iran and
managing a bitcoin account,” says Jon Matonis, a founding board
member of the Bitcoin Foundation, a Seattle nonprofit that promotes
the currency. The exchange rate in Iran is 332,910 rials per bitcoin.
It isn’t known how many Iranians use bitcoins to skirt sanctions.
According to localbitcoins’ Kangas, 32 people in Iran have
contacted each other through his site.
An
internal FBI report in April expressed concern over the online
currency. The report was leaked to Wired and Betabeat. “Since
Bitcoin does not have a centralized authority, law enforcement faces
difficulties detecting suspicious activity, identifying users, and
obtaining transaction records—problems that might attract malicious
actors to Bitcoin,” says the report. For now, Iranians are using
bitcoins to maintain a fragile connection to the outside world.
The
bottom line: Iranians are resorting to virtual currency to move money
into and out of the country in a way that Western authorities find
hard to detect.
No comments:
Post a Comment
Note: only a member of this blog may post a comment.