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Turns to Crypto to Enable Easier Spending by Tourists Iran’s government and private sector are eyeing to resolve a decadeslong lack of international payment channels in the Islamic Republic

hen US President ton topics in Iran, more so after iterated in early February that Donald Trump US sanctions were reimposed. digital are an ongo- unilaterally Many high-profile projects are ing focus for the organization. withdrew from currently in the works in Iran. The CHTO chief had in late July the Joint Com- It comes no surprise, then, 2018 proposed forming a joint Wprehensive Plan of Action in that the intersection of tourism digital fund with India May 2018 and reinstated harsh and cryptocurrencies is being to develop tourism ties. Also sanctions on Iran, many feared seriously eyed by both the gov- in July, chairman of the board that Iran’s tourism sector, which ernment and the private sector. of the Iran Electronic Tourism has been continuously growing If Iran manages to successful- Association, Hassan Ansari, in recent years, would take a hit. ly tap into existing potentials in announced that after secur- It comes as But while the number of tour- this area, it could prove to be a ing approval from Mounesan, no surprise, ists, mainly from Europe, has turning point for the country’s the proposal to establish a declined, the of underdeveloped tourism sector state-run digital currency for then, that the the Iranian rial — triggered by and a source of much-needed the tourism sector is currently intersection sanctions and exacerbated hard currency. Iran feels a deep being reviewed by top-level au- of tourism due to poor management — void in terms of money transac- thorities, including First Vice lured many more foreign tour- tions in its tourism sector due to President Eshaq Jahangiri, and crypto- ists to Iran, especially from decadeslong restrictions that then- of Iran head currencies neighboring countries. The rial mean foreign tourists have to Valiollah Seif and Minister of lost more than 60% of its value pay for almost all tourism facil- Information and Communica- is being in 2018, making Iran, already a ities in cash due to a lack of ac- tions Technology Mohammad seriously price-competitive tourist des- cess to international payment Javad Azari-Jahromi. eyed by tination, even cheaper. Intensi- methods. No further details have been fied pressures also prompted Efforts by the Iranian govern- publicized by the government both the both the government and the ment to utilize digital curren- yet. That is possibly because government private sector to fast-track pro- cies in the tourism sector are Iran’s digital currency scene and the jects long in the pipeline. led by the Cultural Heritage, has witnessed several high-pro- Meanwhile, cryptocurrencies Handicrafts and Tourism Or- file developments in recent private and blockchain technologies ganization (CHTO), whose months on the state level that sector have recently become hot-but- head, Ali Asghar Mounesan, re- could impact the proposal. For

62 April 2019 | No. 19 Preview Issue one, a sovereign cryptocurren- But while the government pon- turn into a lucrative niche mar- cy backed by the rial and relat- ders its next move, a vastly nim- ket. During the 12th Tehran In- ing blockchain infrastructures bler private sector has already ternational Tourism Exhibition are nearing completion under seen tangible results, albeit on held Feb. 12-15, the Rmoney the auspices of the central a small scale. exchange, bank. On the other hand, the IranByBit is a small travel start- which started operating less central bank released an early up consisting of several enthu- than a year ago after obtain- draft regulatory framework on siastic millennials that offers a ing a central bank license, un- Blockchain cryptocurrencies in late Janu- host of services and accepts veiled a tourism digital curren- technologies ary that needs to be finalized payments both in and cy system. The system allows before any state projects can cash on arrival. At the moment, all firms active in the tourism could begin work in earnest. they offer tours, accommoda- sector to sign up and receive facilitate Blockchain technologies tions and Iranian SIM cards and their money from their foreign tourism in could facilitate tourism in a debit cards. customers in cryptocurrencies variety of areas, from security “A state-run crypto doesn’t have without paying any fees. They a variety of and identification at airports the potential to address any of can then change their crypto- areas, from and other venues to payments, the problems of accessibility, currency incomes to rials using security and reservations, luggage tracking acceptability and reliability of Rmoney. and income management. But the local currency in tourism,” “The goal of designing the tour- identification actually realizing such uses re- IranByBit research and devel- ism digital currency system is at airports quires extensive research and opment head Ziya Sadr told to resolve issues relating to for- technological infrastructures, Al-Monitor. “On the other hand, eign payments,” Rmoney CEO and other whereas Iran still struggles with a widely accepted and accessi- Mehdi Naseri said in a recent venues to providing necessary physical ble cryptocurrency such as bit- interview. “As payment obsta- payments, and digital infrastructures for could help small business- cles in this sector are resolved, its tourism sector. Therefore, es in the tourism sector to allow we will certainly witness facil- reservations, any short-term attention direct- a wide range of customers from itation of processes in attract- luggage ed by the Iranian government anywhere in the world to use ing foreign tourists, which, in tracking to this area will be focused on their inside Iran,” he said. addition to generating foreign facilitating payments through Other private sector players are currency revenues, will create and income digital currencies. also entering what could soon many job opportunities.” management

Monthly Economic Magazine April 2019 | No. 19 Preview Issue 63