Protests erupted across Iran’s capital of Tehran on Monday as the rial hit record lows against the US dollar, a currency collapse that locals blame on the central bank’s poor fiscal policies as they watch the value of their life savings evaporate.
While there’s no single solution to the economic hardship that Iranians are facing, Bitwise CEO Hunter Horsley suggested that Bitcoin (BTC) is a way for people around the world to protect themselves from plunging currency values.
“Economic mismanagement — The story of the past, present, and future,” Bitcoin is a new way for the people to protect themselves,” Horsley said in a post to X Monday.
The rial has lost over 40% purchasing power since the two-week war with Israel in June and is now at a record low of about 1.4 million to the US dollar, the Financial Times noted. Alex Gladstein, chief strategy officer for the Bitcoin-focused Human Rights Foundation, pointed out that: “The official rate in the early 1980s was **70 per dollar**.”
The Central Bank of Iran’s governor, Mohammad Reza Farzin, has resigned amid the protests, adding further uncertainty to the country’s future.
While crypto trading in Iran is permitted, rules around self-custodying crypto are less clear, and Bitcoin mining is heavily regulated. VanEck head of research Matthew Sigel noted that the government has been dissuading locals from getting involved with Bitcoin mining.
“Worth recalling: Iran recently cracked down on unregistered Bitcoin mining, even offering cash rewards for citizens to report their neighbors, just as demand for stores of value soared.”
The strict Bitcoin mining rules have held Iranians back from capitalizing on incredibly cheap electricity prices, which would allow them to mine Bitcoin for around $1,300 per BTC as of October — a fraction of Bitcoin’s current price of $87,600.
Source: Mike PompeoEight Iranian banks at risk of dissolution
Iranians are also suffering under widespread sanctions imposed on the theocracy for its nuclear program and for supporting terrorist groups in the region — losing significant access to international financial networks and the US dollar, and weakening the local banking sector.
In October, Iranian state-owned lender Bank Melli fell bankrupt, putting the assets of more than 42 million Iranians into jeopardy.
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In February, Iran’s central bank warned that eight other local banks risk dissolution unless they implement reforms.
“If they are not reformed, we will move towards dissolution and merger,” Iran’s central bank reportedly said at the time.
To add insult to injury, Iranian crypto exchange Nobitex suffered an $81 million hack in June, and Iranian crypto flows fell 11% between then and July amid a series of conflicts with Israel.
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Source: https://cointelegraph.com/news/iranians-protest-against-currency-collapse?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
