Iran Won't Accept Bitcoin For Hormuz Tolls

There is currently a wave of misinformation suggesting that Iran has chosen Bitcoin as their settlement medium for Hormuz Straight passage toll payments.

That’s complete nonsense. Iran would not gamble their Hormuz revenue on Bitcoin, or any other non-pegged crypto asset for that matter. If Iran would accept payments in cryptocurrencies (I don’t see why they wouldn’t), they would almost certainly effectively settle in a stablecoin.

Instead of investing Hormuz tolls into Bitcoin, Iran will most likely use them to buy gold, foreign exchange currencies (especially Yuan!) and budget deficits (which includes financing reconstruction efforts). This presents a type of an investment aimed at increasing the attractiveness of Iran government debt as collateral (in the longer-term), as well as the liquidity, value and use of Iranian Rial.

Moreover, Bitcoin is much easier to be sanctioned by Iran’s adversaries that the alternatives I presented, namely gold and Yuan. Unlike what many people may lead you to believe — you can certainly “blacklist” individual satoshis/coins, given that the transactional ledger is public by design. You can’t blacklist a gold atom (Au) 😁

I’m certainly not the only person that understands this, so I find it highly unlikely for Iran to choose Bitcoin over the prior alternative.

Iran To Require Rial For Hormuz Toll Payments

Unsurprisingly, it's been confirmed that Iran will not accept payments for its tolls in Bitcoin.

As I have explained a few weeks ago -- it would be counterproductive for Iran to do so. Now, it looks like Iran will require payments in their national currency - the Iranian Rial.

Unlike using Bitcoin, using Rial for settlements brings numerous advantages to Iran, which include flexible settlement (due to local central bank control); increasing demand for Rial whose value has recently collapsed due to sanctions/legal prohibitions aimed at Iran; and creating an incentive for re-integrating Iran into the global economy, thus effectively nulling at least a subset of sanctions

Bitcoin once again fails its test as an international reserve currency, but this isn't a surprise if read my numerous articles on this topic.