Some Blockchain Proposals to President Pezeshkian
Inflation, sanctions, growth and economic leaps, production, global markets, foreign currency reserves—these are the key terms we hear in election times. Inflation, sanctions, and a sick economy are problems that every Iranian citizen struggles with daily: the stock market, which goes through consecutive periods of stagnation, and the capital and ideas destroyed at the very beginning of their creation. The main question for the author is whether the only solution to overcoming these problems lies in the remedies proposed by presidential candidates over the past few decades. Is there no way beyond short-term fixes and coercive methods? These solutions only soothe Iran’s economy like an infected, festering wound for a short while. The motivation for the author to begin this piece was to explore and find an answer to the question: where does blockchain technology fit in the financial market and economy of Iran, and what impact can it have on the recovery process?
Table of Contents
When the upcoming text began to take shape, it went through many difficult stages. Several drafts were prepared, and for each draft, the media was thoroughly scoured! All texts, debates, and videos related to every presidential candidate and the experts associated with them were reviewed to find suitable content for the first part of this text and write a few words about it.
The outcome was astonishing, and the title of one of Simon Critchley’s books, the British Continental Philosopher, best describes the promises of the presidential candidates in cryptocurrencies: “Very Little… Almost Nothing.”
It was hard to believe that while there was extensive discussion about Russia’s $11 billion import volume of vegetables, sanctions, and the ways in which the country moves money, the subject of cryptocurrencies, a field in which about one-third of the population is involved and which is one of the most fertile and promising areas of emerging technologies in economics and trade, received only a few seconds of attention, and only one candidate, Mohammad-Bagher Ghalibaf, spoke vaguely, without detail, and completely cold and impersonal!
Ghalibaf, who made the most effort to avoid direct conflict, sarcasm, and responding to jabs among the six candidates, might have done better to use this approach occasionally to present his economic plans in detail, referring the audience to a social media page for further information. How good would it have been if one of those proposals was about cryptocurrencies and blockchain technology?
For this reason, the author postponed finalizing this piece until the second round of elections, hoping that at least from Saeed Jalili, who claimed to have developed hundreds of detailed plans for his potential future government, they might hear a word about cryptocurrencies. Unfortunately, the author was left disappointed. Thus, the piece you’re reading did not turn out as expected, and it is not the text the author desired.
Therefore, the author admits they are unsure whether to call this piece an open letter or a document with suggestions for the president! It is logical that suggestions should be based on the mental frameworks and plans of individuals to have a greater impact. With that explanation, we now move on to the body of this text.
Introduction
The 14th presidential election in Iran was a major surprise for all Iranians and probably many politicians around the world. While the presidency of Ebrahim Raisi, the late president, still had at least a year left, a tragic plane crash suddenly threw the country into a political upheaval.
Nevertheless, the presidential race coincided interestingly with two major events. The first was the massive popularity of the “Hamster Kombat” game on the TON blockchain platform and Telegram, which became widely played by both the young and old; another massive wave started after the rise in value of NOTCoin in the country.
The second event was the official start of the competition between Donald Trump and Joe Biden for the U.S. presidential election, which had an interesting outcome. In mid-June, Trump added another title to his self-proclaimed title: “Crypto President!”
Trump, as always, went straight to the point and, while attacking the Biden administration, the Democrats, and U.S. regulators, declared that he would end the “war on cryptocurrencies” and presented himself as a major supporter of the sector.
He made these remarks at an event aimed at gathering investors from various technological sectors in San Francisco, where he also managed to raise $12 million for his campaign.
Meanwhile, the six presidential candidates in Iran were on television for dozens of hours, participated in debates for hours, and claimed what they would do in various industrial, commercial, and knowledge-based innovation fields. They discussed how they would address sanctions or bypass them, how they would support elites and youth, and how they would use every tool available to improve the economy and streamline processes.
Among them, Mohammad-Bagher Ghalibaf was the only candidate who briefly mentioned that the government and parliament were in the process of drafting laws for the cryptocurrency sector and that this area has great potential.
Thus, the lack of plans or mentions by candidates regarding cryptocurrencies will be briefly discussed, as it somewhat reflects the overall governance mindset in this regard. Then, we will offer suggestions for the future president, hoping they may create even a small shift.
Ignorance, Lack of Planning, or More Important Issues? That Is the Question
Surprisingly and frighteningly, whenever a wave of new technologies and emerging fields spread across the country, despite the country’s clear need for them, and the numerous young people with new ideas and the appropriate technical knowledge who start ambitious projects and startups, governments either fail to support or delay legislation and regulation to such an extent that all opportunities are ignored and wasted.
After the stage of wasting opportunities and ignoring capacities, suddenly, the focus shifts to attacking foreign alternatives, and they are taken out of reach. From here on, a headquarters or command center is formed to support Iranian models, but instead of competing with each other and foreign examples, companies and projects easily benefit from the available financial and service resources, distributing unfair rents, and monopolies are formed by individuals who were once creative. This behavior is natural in a chaotic system full of biases.
Ultimately, the people resort to foreign alternatives through shortcuts and illegal routes, and Iranian projects head toward decline and destruction. In the case of messaging apps, search engines, and navigational tools, this scenario has always been tested, and the result has consistently been disappointing and the same.
Currently, despite efforts underway at the Central Bank and the proposal made by the Speaker of Parliament, who is also a presidential candidate, it seems that cryptocurrencies, blockchain technology, and the entire sector are still in a state of invisibility and neglect.
Therefore, it seems that benefiting from the potential and applications of this field is still not a top priority for the governance system; meanwhile, fortunately, there are dozens of cryptocurrency exchanges in the country, nearly 200 companies in the blockchain and cryptocurrency space, and millions of Iranians are connected to this world through various methods and channels. These individuals and independent technologists are working hard to clear a path so that the crypto world remains attractive and profitable for Iranians.
Is such an approach a result of ignorance, a lack of planning, and negligence, or does the problem stem from something else? Let’s take a closer look at Ghalibaf’s brief comments and the overall approach of the country’s economic governance system regarding cryptocurrencies. The Speaker of Parliament mentioned that there were plans to leverage the potential of blockchain technologies, and it seems that legislation is also on the agenda.
On the other hand, the Central Bank has banned the relationship between banks and customers in cryptocurrency exchanges but has somehow allowed online crypto exchanges to operate. Meanwhile, this institution recently unveiled the electronic rial, or in other words, the crypto rial.
The impression given to an observant audience is that the governance system is both slow and intends to dominate a significant portion of this industry for its own benefit. The lack of proper vision and the intent to have an all-encompassing government intervention will undoubtedly result in stifling and limiting the blockchain industry.
Governance should be a customer of these new technologies and facilitate their growth. We have seen many times in the automotive or aviation industries the damage caused by state-imposed regulations and the use of government or rent-seeking interests to benefit state power.
On the other hand, most Iranian politicians and statesmen always believe that if something is not under the government’s control, it will eventually spiral out of control and undermine state power; however, history has repeatedly shown that the real and effective power of any government, especially in modern nation-states, emerges when structures operate freely.
According to scientific evidence, free systems reach balance and order over time and align with the main objective of the larger system. The outcome is increased support for the government—the same government that provides favorable conditions for forward-moving activities and removes barriers instead of creating them. This process occurs automatically and without excessive government intervention.
The cryptocurrency industry is no exception. Successful blockchain projects like Bitcoin and Ethereum, without the intervention or support of any government, created an ecosystem that quickly achieved a 5% and growing share of global GDP production.
This technology has entered all sectors, from supply chain management and liquidity provision to healthcare, entertainment, and the arts, heralding a more transparent and independent world.
Numerous projects around the world have been launched or are in the early stages, each promising a revolution. A simple look at the articles in this journal or a quick internet search reveals hundreds, perhaps thousands, of real-world ideas in this space.
With this in mind, we now move on to the suggestions we have for the future president.
A Few Suggestions for President Pezeshkian
Our country faces problems in almost all industrial, production, civil, educational, energy, and healthcare sectors due to structural economic issues, the state’s budget deficit, chronic high inflation, and international sanctions, causing us to miss out on many opportunities to improve the situation.
Therefore, President Pezeshkian must be able to utilize every available tool to solve these problems. Undoubtedly, one of the most powerful solutions and tools is the technology of cryptocurrencies and blockchain. Here, we would like to offer a few practical suggestions to Masoud Pezeshkian.
Facilitating Legislation and Regulation and Reducing Interference
Every new president and parliament that comes into power speaks of easing working conditions and permits, but in the end, dozens of contradictory regulations are created with maximum government interference, leaving investors and producers more confused than ever.
President Pezeshkian, the Minister of Economic Affairs, and the Governor of the Central Bank, please learn from the experience of industries such as the automotive and steel sectors. Minimize your interference, even under the pretext of consumer protection. There is no need to allocate foreign currency to the cryptocurrency industry or its startups for their required technical infrastructure; simply collaborate with them for the import of the technologies they need. This industry itself is well-versed in currency and capital procurement and will be your ally.
Learn from the world and the advanced countries in this industry. For example, the United States and the United Kingdom have placed immense pressure on the cryptocurrency industry, with countless projects and companies embroiled in endless battles with their regulatory bodies. This has led to capital fleeing to countries like Hong Kong, which, by the way, is the competitor’s playing field—China.
However, no large, sweeping regulations or specific laws have been passed in these countries that impose contradictions or burdens on these industries; at most, there have been interpretations and adaptations.
Furthermore, the maximum intervention that governments have directly made has been aimed at reducing their responsibility toward users. The future government, please, if you are going to enact laws to organize this sector, ensure they are transparent, clear, explicit, and minimal.
Just pursue the alignment of existing laws with the conditions of this industry so that people know how to claim their rights when problems arise. When drafting laws, consult with all experts in the field, not just those who are “insiders.” More minds lead to better outcomes.
Strengthening the Private Sector, Circumventing Sanctions, and Managing the Capital Market and Domestic and Foreign Investments
The governance system of the country is aware that in times of sanctions, it needs to find ways to circumvent them. If sanctions continue, what better method can be imagined than decentralized and borderless cryptocurrency markets?
However, it seems that politicians are unaware of this. The government and none of the state sectors have been the main victims of the sanctions; it has always been industries and real investors who are at risk and, by chance, can bypass the sanctions, open new avenues, and even possess the economic power and lobbying ability to negotiate at the international level.
It should not be forgotten that foreign ministers and defense ministers in powerful countries, unless chosen from among politicians or intelligence personnel, are always selected from the most influential private sector figures. For example, Trump’s first Secretary of State, Rex Tillerson, was a veteran and influential figure in the oil industry, although his moderation and logical approach led to his dismissal.
Mr. President, strengthen the cryptocurrency private sector and let it grow freely. Do not turn them into foot soldiers for your own agenda. Allow other private industries to freely engage with the world of cryptocurrencies and local experts, seeking their help to meet their needs, thereby bypassing sanctions through such cooperation.
All candidates have spoken about the reluctance of neighboring countries to repay their debts to Iran due to sanctions. Be aware that Iranian and Iraqi traders have long been incorporating cryptocurrency wallets into their transactional cycles.
Mr. President, and all members of the future economic cabinet, providing liquidity and foreign currency, as well as managing supply chains, is much easier in the blockchain world than through traditional structures. By outsourcing your responsibilities to the private sector and allowing them to interact with cryptocurrencies, you can be sure that the growing demand for currency and investment will be met much more easily through cryptocurrency exchanges rather than through traditional exchange markets, thus avoiding currency tensions.
Do not forget that the safest and, by coincidence, the most transparent economic environment based on blockchain has already been created, which can resolve issues related to financial tracking and prevent money laundering, all without the need for additional costs or new supervisory systems.
On the other hand, our capital market is currently slow and ineffective, and the rate of fixed capital formation is at a dangerous threshold. Without strengthening the capital market and increasing investments, financing for new projects, production activities, and industries is becoming harder every day. Cryptocurrency markets can swiftly assist investors without the limitations of banking and securities systems and without time restrictions.
Another wing to strengthen the markets and production is foreign investment. Certainly, in the context of sanctions, new solutions devoid of dollars and euros can be considered, but quicker avenues can also be explored.
Small and large foreign investors (especially those less affected by U.S. sanctions) and even Iranians living abroad can be encouraged to transfer their investments to Iran through blockchain platforms. Alongside effective negotiations with the world, one can expect the President to strengthen more channels to gain an upper hand in negotiations.
Managing Subsidies and Energy
The real necessity of adjusting energy costs and redistributing the subsidy system, as well as the issue of fuel smuggling and shortages of gas and gasoline, is undeniable today. There has been talk of allocating subsidies based on gasoline (or a similar plan like Saeed Jalili’s One Plan) for every national ID. Furthermore, in the past three years, we have witnessed two major hacks of the gasoline system, and gas stations are still recovering from the last incident.
Mr. President! The blockchain platform is undoubtedly an excellent foundation for managing subsidies. Anyone can have an account on a blockchain network, receive their energy subsidies through it, and sell their share of fuel to those without quotas, all in a transparent and secure manner. Furthermore, hacking the fuel system based on blockchain, whether connected to the internet or intranet, is almost impossible. Please trust the technical capabilities of domestic professionals.
Job Market and Employment Generation
The cryptocurrency industry is vast and untapped, with great potential for many economic, programming, and managerial experts to join and create a powerful structure. Mr. President! By strengthening this field, you can not only boost a new economic arm of the country but also generate employment and increase GDP independent of oil, through this market. Facilitating the cryptocurrency sector will undoubtedly be a win-win for both the government and the nation.
Tokens and Countless Opportunities
One of the most important areas in the blockchain world is undoubtedly tokens—whether NFTs or general-purpose tokens, all of which have numerous applications. Tokens can provide significant opportunities in several sectors; for example, two crucial fields are intellectual property rights and financing.
Regarding the first point, one of the most problematic issues today is intellectual property rights, which have become highly complex and convoluted in legal processes and judicial proceedings. A bit of research reveals that the blockchain world provides a simple solution—unique tokens (NFTs).
On the blockchain platform, with a few clicks and authentication, it is easy to register at least basic intellectual property documents (such as registering an idea or a basic design before official registration), reducing paperwork and legal disputes. Blockchain networks are secure and transparent, and this is a big step toward implementing e-government. This is just one application of this type of token.
The second point, financing, will undoubtedly support the economic goals of all governments, regardless of their orientation. Whether in the public economy or private sector, financing and investment are challenging and complex issues. Budget laws, restrictions, and the side effects of governments printing money and expanding the monetary base, along with cumbersome regulations for the private sector, create significant challenges for companies.
For example, companies seeking public financing have no choice but to go through banks, markets, and securities mechanisms that require many legal requirements, are time-consuming, and very costly.
For a small company or a startup that simply wants to raise capital through crowdfunding, there is no quick legal path. However, if such companies can issue tokens on the blockchain, at least half of the process is simplified. These tokens can replace many contracts and paperwork without the need for new regulations or supervision.
Mr. President! Strengthening the position and expanding the token development space, both from a technological infrastructure and legal perspective will be a highly profitable subject. These suggestions represent just a small fraction of the vast opportunities for the development of tokens.
Mining and a Profitable Method
In an era when acquiring foreign currency has become harder than ever, and participation in the cryptocurrency market has turned into an uphill battle for the country and even regular citizens, mining can be a safer and simpler method of achieving economic benefits for the country.
This issue is important not only for well-known cryptocurrencies but for all currencies, as lesser-known cryptocurrencies are less likely to come under international sanctions and scrutiny. By developing infrastructure, legal permits, and even accepting foreign investments for cryptocurrency mining, numerous benefits and opportunities can be created for the country.
Mr. President! This issue is undoubtedly important and can only be managed at the national level. It should be understood that the “real” private sector, not the “privatized” sector, will be able to carry this out.
Final Words
Mr. President, Dr. Masoud Pezeshkian, and dear audience! Let me end this article with an example. El Salvador, due to widespread economic problems, was forced to abandon its national currency and adopt the U.S. dollar as its official currency. With limited dollar resources, the economy automatically became active, and inflation and the country’s economic conditions began to improve. However, this country knows that its connection to the United States is dangerous and must consider alternative solutions.
Nayib Bukele, the President of El Salvador, declared Bitcoin alongside the dollar as legal tender in the country. In other words, a system was created to help the country’s economy that, instead of relying on the U.S. Federal Reserve or the country’s central bank, is connected to a decentralized and borderless structure, providing shelter from international political and economic turmoil.
Mr. President! This is an international lesson showing how effective cryptocurrencies can be. If you want to reduce dependence on foreign currencies, please seriously consider implementing cryptocurrencies and blockchain technology, and become more active in this field.
