In interesting report from Gulf Cooperation Council (GCC) Business Watch from back in June. It ties into another report I shared last week about increased on-chain activity during political turbulence. I'm not sure what the takeaway from all of this is, other than that our orange coin is becoming an increasingly significant factor in geopolitics.
The global financial landscape is undergoing a tectonic shift as sanctions tighten around Iran and its access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) remains restricted. While the move aims to curb Iran’s ability to conduct international transactions, its implications stretch far beyond Tehran—raising critical questions for the Gulf Cooperation Council (GCC) states regarding regional financial stability, economic partnerships, and future transaction infrastructure.
Cryptocurrency: A Shadow Solution
With fiat avenues blocked, Iran has turned to cryptocurrencies such as Bitcoin for import payments and domestic liquidity support. This has reignited debate over digital assets in the region:
- Regulatory Opportunity: GCC nations may formalize frameworks for blockchain and crypto usage to lead, not lag, the evolving financial landscape.
- Risk of Evasion: Crypto also opens pathways for sanctions evasion, necessitating rigorous compliance tools and transparent oversight.
- Central Bank Digital Currencies (CBDCs): Countries like the UAE and Saudi Arabia are piloting CBDCs, aiming to secure a role in the future of regulated digital finance.
Not surprising. The transfer is almost immediate, the value capacity can be huge, and the coin is accepted globally outside of Swift. It's the perfect alternative channel aside from chain tracking. That last bit is the reason why Monero still exists, LOL.
Why would nation states care if their utxos are being tracked? It's hard for me to think on this level.
When other nation states are trying to blockade them, it matters. Iran's stability required interaction with markets, otherwise it's one key asset, oil, is useless. It needs money to function like any other government. When cut off from cash or equivalents, it begins to suffer. This is an age-old issue for Iran, otherwise known as "Dutch Disease."
https://www.imf.org/en/publications/fandd/issues/series/back-to-basics/dutch-disease
It seems like what matters is that it is uncensorable, not that it is private.
If that was the case, Bitcoin is not the right vehicle. BTC has never been private.