Iranian Students in UK Use Bitcoin to Bypass Sanctioned Banking

Iranian students studying at British universities are turning to Bitcoin to circumnavigate imposed sanctions on the SWIFT banking network.

In November, SWIFT suspended several Iranian banks from its service after the imposition of United States nuclear sanctions on Tehran. This has resulted in difficulties for Iranian students in the UK when obtaining cash. Many universities are now advising to return to Iran and return to the UK with sufficient cash funds to pay for courses and living expenses.

For many students, this is wholly impractical, involving crossing borders with large amounts of cash, notwithstanding the problems of personal security in doing so. There seems to be little option for students as universities payment systems can’t overcome the problem caused by the SWIFT sanction.

Consequently, some Iranian students have turned to Bitcoin, which was always intended to be a payment system obtaining their fiat funds through crypto exchanges. Maziar Bahari, editor of Iranwire, a news portal for Iranian citizen journalists based outside the country, suggests that students are now “…using Bitcoin and other cryptocurrencies in order to get money” after struggling to get banking services in the UK.

Its also rumored that the Islamic Republic of Iran itself may be circumventing the US-led economic sanctions in its own small way. The Financial Crimes Enforcement Network, a bureau of the United States Department of the Treasury, claims that “since 2013, Iran’s use of virtual currency includes at least USD 3.8 million worth of Bitcoin-denominated transactions per year”.

It now remains to be seen if Iran goes through with its plans for the imposition of a national cryptocurrency to bypass economic sanctions. The new Iranian state-backed cryptocurrency would be pegged 1:1 with the Iranian rial (IRR) and will initially be used by commercial banks in Iran once the Central Bank of Iran approves the cryptocurrency. Approval is likely, considering this cryptocurrency was developed by the Informatics Services Corporation at the request of the Central Bank of Iran.

International crypto exchanges, including Bittrex and Binance, have also begun complying with the sanctions against Iran and have stopped dealing with Iranian clients. This will make the travails of UK universities’ Iranian students even more complicated moving forward in the 2019 academic year.

 

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