Iran’s government is looking at increased Bitcoin and cryptocurrency adoption as a way of ensuring the flow of much-needed revenue from its tourism industry. This move comes as state officials try to prevent the country’s booming tourism sector from being negatively impacted by the resumption of U.S.-led economic sanctions.
Both public and private stakeholders are reportedly looking at the benefits of adopting cryptocurrency payments to lift any possible restrictions suffered by visitors to the countries as far as payments are concerned.
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According to Al-Monitor, there is a growing interest between important actors in both the Iranian government and the private sector to explore the use of cryptocurrency payments in the tourism industry. With the onset of renewed economic sanctions, there are fears that visitors to the country will have limited payment avenues while in Iran, a situation that would severely hamper its tourism appeal.
When a coalition of nations led by the U.S. lifted sanctions against Iran in 2015, it led to a renaissance in its tourism industry. The subsequent boom saw annual revenues of $3.3 billion and $3.5 billion in 2015 and 2016, all from tourism alone. Global hospitality brands also recognized the emerging market and established a significant business presence in the country as well.
So, with fresh sanctions, Tehran is looking for a way to protect the cash cow that is its tourism sector, by adopting cryptocurrency payments. The major problem likely faced by visitors to the country is the inability to make payments using mainstream avenues like credit/debit cards. Thus, the Iranian Cultural Heritage, Handicrafts and Tourism Organization (CHTO) is leading to charge to see the benefits that lie in the intersection of virtual currency adoption and the nations tourism sector.
Bitcoin a Better Option that “Crypto-Rial”
One of the options being seriously considered is the introduction of a state-backed cryptocurrency. The CHTO is reportedly looking to partner with India, to create a joint virtual currency in the hopes of developing strong tourism ties with both countries. Also, there are plans to create a state-backed digital coin specifically meant for Iran’s tourism scene.
However, experts opine that such a move does little to solve the problem of access to local currency. Instead, stakeholders believe that the adoption of a widely used cryptocurrency like Bitcoin would be more advantageous.
Speaking to Al-Monitor about the matter, Ziya Sadr, a senior executive at IranByBit, a local travel agency that accepts BTC payments, said:
“A state-run crypto doesn’t have the potential to address any of the problems of accessibility, acceptability and reliability of the local currency in tourism. On the other hand, a widely accepted and accessible cryptocurrency such as bitcoin could help small businesses in the tourism sector to allow a wide range of customers from anywhere in the world to use their coins inside Iran.”
Circumventing US Economic Sanctions
For Iran, the emergence of BTC and other cryptocurrencies offers an opportunity to have access to global payment infrastructure despite U.S. economic sanctions. Going by the measures being taken on the tourism front, it seems like the government isn’t prepared to allow its economic situation deteriorate any further.
In 2018, the rial plummeted by more than 60 percent in value. Many citizens reportedly turned to Bitcoin despite attempts by the government to restrict such activities in the fear of increased capital flight. Since the start of the year, Tehran has begun to take preliminary steps to regulate the cryptocurrency market in the country with the initial focus on the legality of virtual currencies.