Countries such as Iran leader Hassan Rouhani left), North Korea (Kim Jong-un center) and Venezuela (Nicolas Maduro) are turning to cryptocurrencies to circumvent U.S. sanctions
America’s rivals more and more bitcoin-style cryptocurrencies after their economies were brought to their knees due to crippling U.S. sanctions, experts have warned.
Iran, North Korea, Russia and Venezuela are already investing in the technology, in an attempt to counter American economic power – and an expert says these nations are the forms of alliances by technology.
A form of digital cash, cryptocurrency, use of encryption for secure transactions and control the creation of new units. It makes use of cryptography, a form of secret code, from the Second World War, for the processing of transactions are safe. Its main asset is untraceable.
U.S. sanctions are working by placing a ban on dealings and transactions with persons, countries and companies.
These bans are often enforced with the help of the mainstream financial institutions.
But cryptocurrencies don’t work within this system. In fact, bitcoin and other cryptocurrencies were invented in part to get around the existing regulated financial system.
This means that countries such as Iran, use or control of such a currency would allow it to circumvent certain measures such as a ban on buying US dollars or even facilitate arms deals.
In May, the United States pulled out of a deal to lift sanctions against Iran in exchange for curbs on its nuclear program – a plan of President Donald Trump has repeatedly blasted.
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Soon after, Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, spoke about cryptocurrencies as a way for countries to avoid the US dollar transactions – as a possible replacement of the international SWIFT payment system.
And Alireza Daliri, a senior science and technology official of Iran’s Presidential Office, said: “We are trying to prepare the grounds for the use of a domestic digital currency in the country.
“This currency would facilitate the transfer of money (to and from) anywhere in the world.
“It can help us at the time of sanctions.”
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Darren Parkin, editorial director of the cryptocurrency news site Coin Rivet, described how the introduction of cryptocurrencies will help to push economic alliances between these states.
He pointed to the example of Iran and Russia working together to overcome the penalties that will affect both of them.
He told Fox News: “The problem of the US is if they have to do with fiat currency (currency that a government has declared to be legal tender) they can monitor the effect of the sanctions.
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“But if countries use cryptocurrency, they have fallen under the radar of what the AMERICAN can see.
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“They are pushed underground.”
Venezuela also reportedly received the support of Moscow, when it was hit with sanctions, leading to food shortages, rising prices, a collapse of the health care and a crime spree.
In February the South American country launched a new cryptocurrency called petro that Nicolas Maduro, the socialist leader of Venezuela, is described as “kryptonite” against the power of the U.S. government.
An anonymous executive at a Russian state-owned bank, the claims of the Kremlin oversaw the creation of the petro after President Vladimir Putin signed off on in the past year.
In February, Venezuela launched a new cryptocurrency called petro; an anonymous executive at a Russian state-owned bank, the claims of the Kremlin oversaw the creation of the petro after Putin (photo) signed off on it last year
The source told: “the People who are close to Putin, they said to him, this is how to avoid the penalties.
“This is how the whole thing started.”
Last month, Vladimir Gutenev, the first deputy head of the economic policy committee of the state Duma, said Russia should the execution of transactions in cryptocurrencies is linked to the value of gold to frustrate AMERICAN attempts to thwart deals on Russian weapons, and civil affairs.”
“And I am sure that this is a very interesting option for China, India and other countries, as well,” he added.
Meanwhile, Priscilla Moriuchi, a former NSA cybersecurity official, told The Hill North Korea earns an estimated $15 million to $200 million by the mining and sale of cryptocurrencies.
Pyongyang: the army of hackers is also believed to have stolen cryptocurrency from organisations and individuals all over the world.
If states opposed to the US use cryptocurrency does not have enough analysts have warned bitcoin and other cryptocurrencies are already being used to secretly move money between sympathizers and terror cells all over the world.
Nikita Malik, the author of a recent report by the BRITISH Henry Jackson Society about online extremism called Terror In The Dark, said: “The government urgently needs to increase their knowledge of terrorist activities in cyberspace and the use of technologies such as bitcoin.
“By collecting money and making financial transactions online, terrorists and other criminals, they may not suffer from the financial regulators, or other third parties who might otherwise take steps to prevent their activities.
“Regulation in this area is to move carefully as we balance the freedoms with guarding against threats to our security – but the time has come to deny extremists the space that they need online to plan fresh atrocities.”