US Seeks to Ban Transactions with Iranian Cryptocurrency

Draft legislation intended to impede the efforts of Iran to issue a sovereign digital currency was filed in the US Congress. The Blocking Iran Illicit Finance Act bans US companies and citizens from any dealings and transactions in Iranian cryptocurrency. The bill also gives sanctions against foreign nationals and organizations supporting the crypto’s development.

A group of members headed by Wisconsin Republican Mike Gallagher sponsored the bill filed in the House of Representatives this week. The act focuses on strengthening the current US sanctions on several activities and imposing new restrictions in relation to Iranian financial institutions and organizations offering services to banks. The authors of the draft law have also proposed measures intended to hinder Iran from creating its digital coin to circumvent Washington’s economic sanctions.

The bill prohibits transactions and dealings in any digital coin or token identifiable as “Iranian digital currency.” It introduces penalties against US corporate entities and citizens as well as foreign nationals and companies offering material, technological, or financial support for the creation of the Iranian cryptocurrency. Firms and individuals facilitating or conducting transactions related to the sale or purchase of Iranian crypto or any derivative will be sanctioned as well. The same applies when they maintain huge amounts of the currency.

“All transactions related to, provision of financing for, and other dealings in Iranian digital currency by a United States person or within the United States are prohibited,” the legal document reads. The draft law details the sanctions President Trump might impose on violators based overseas. Banning the opening of a bank account as well as blocking any property transactions in the US are included in the measures. Moreover, foreigners may be denied US visa and other entry documents.

The Secretary of the Treasury is tasked to create a progress report on the development of the Iranian sovereign digital currency. It must be presented to Congress within four months after the new law’s enactment. It should elaborate the technical details of the coin being created by Tehran and provide an involved organizations list. In addition, the lawmakers want an assessment of the non-state and state actors helping the Iranians, including the Turkish, Venezuelan, Russian, and Chinese governments.

The Blocking Iran Illicit Finance Act’s introduction came after reports that the nation is progressing in its plans to create a national digital currency backed by the rial. The local media reported in November that the coin’s development has been finalized by the organizations working on the project and are now waiting for the Iranian central bank’s approval.

Following the Trump administration’s withdrawal from the Iran nuclear deal and the introduction of US sanctions, Tehran has stepped up its sovereign cryptocurrency plan. Last month, some leading crypto exchanges stopped providing services to Iranian residents.