Date: 16 February, 2024
Key Points
- OFAC imposed sanctions on Iran’s Informatics Services Corporation (ISC) for CBDC development.
- Dubai and Turkey firms are also sanctioned for procuring technology for ISC.
- ISC was accused of acquiring national security-sensitive items.
- Central Bank of Iran linked to supporting IRGC-QF and Hizballah, causing regional destabilization.
- Iran aims to use CBDC to evade U.S. sanctions.
- Iran joined BRICS, focusing on cooperation in payment systems and digital currencies.
- Russia supports BRICS’ commitment to using local currencies, not the U.S. dollar.
- Reports suggest Iran and Russia exploring a gold-backed currency for trade.
- Despite initial restrictions, Russia’s draft law in April allows DFAs for cross-border payments.
On Wednesday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Informatics Services Corporation (ISC), a subsidiary of the Central Bank of Iran, responsible for developing Iran’s central bank digital currency (CBDC) and other payment systems.
Two firms in Dubai, Advance Banking Solution Trading and Freedom Star General Trading, and one in Turkey are also sanctioned for procuring technology on behalf of ISC. OFAC claims ISC procured information security items subject to national security and anti-terrorism controls. Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, stated, “The Central Bank of Iran has played a critical role in providing financial support to the IRGC-QF (Revolutionary Guard-Qods Force) and Hizballah, two key actors intent on further destabilizing the Middle East.”
Iran’s Central Bank Digital Currency (CBDC)
Iran plans to use CBDC as a tool to circumvent U.S. sanctions. The country recently joined the BRICS intergovernmental organization, emphasizing cooperation on payment systems, digital currencies, and common currencies. Russia, at the same meeting, highlighted the BRICS commitment to promote the use of local currencies over the U.S. dollar.
Reports suggest that Iran and Russia may explore a gold-backed currency for trade. Despite Russia’s initial restrictions on Digital Financial Assets (DFAs), a draft law in April allowed the use of DFAs for cross-border payments, signaling a potential shift in their approach.
References:
https://www.ledgerinsights.com/iran-sanctions-cbdc/
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