HotelsInIran.com (“Hotels in Iran”), a major Iranian hotel booking platform, began accepting payments in cryptocurrency subsequent to the imposition of additional sanctions by the U.S. on Iran and Russia in July 2018.
Adoption of Bitcoin in Regions With Poor Infrastructure
Leonhard Weese, co-founder, and president of the Hong Kong Bitcoin Association (HKBA), revealed earlier this week that a hotel booking company informed its clients their motive for encouraging customers to process payments in cryptocurrencies like Bitcoin, Ethereum, and Bitcoin Cash.
My friend is booking hotels in Iran that require a deposit. The note in the email reads: “Payments in cryptocurrency might sound a bit strange, but the severe American sanctions on Iran’s banking system have left us with not many choices.”
In an interview with CryptoSlate, Weese confirmed he was referring to HotelsInIran in his statement, and said the adoption of cryptocurrencies will intensify in regions excluded from the global banking system and financial network.
“My main takeaway is that we are often looking at cryptocurrency adoption from our perspective as privileged users of the modern financial system. Most of us have credit cards, and the companies we interact with accept them. We can get cash at the ATM wherever we travel and get our salary on time into our bank account.”
He added that he believes bitcoin will be adopted in regions that have poor infrastructures where the majority of their people are excluded from the global financial system.
“But Bitcoin may not be adopted because it is more favorable to users of credit cards and paypal. It will be adopted because it is more favorable to those without.”
With cryptocurrency-backed remittance platforms like Abra, the usage of crypto as an alternative to reserve funds and the fiat system could exponentially increase in the upcoming years – especially if the process of obtaining efficient and secure financial services from regulated banking institutions become difficult.
For instance, in the Philippines, the third largest remittance market behind China and India, the vast majority of individuals rely on remittance outlets and micro-financial service providers such as Lhuillier and Palawan Remittance, because requirements demanded by banks are not feasible for the general population.
“Many people still look at cryptocurrencies and say ‘I won’t use this.’ But already in 2018 people are getting into the situation where they have to use cryptocurrencies as their only payment option, or else they can’t conclude their trade. This is how Bitcoin will eventually be adopted.”
The Government of Iran Seriously Considering Use of Crypto
With its allies, the government of Iran is seriously considering the utilization of major digital assets to evade newly established U.S. sanctions and process cross-border payments.
Most recently, Mohammad Reza Pourebrahimi, the head of Iran’s Parliamentary Commission of Economic Affairs (IPCEA), said in an interview with major Russian publication RBC that the Central Bank of India has already begun cooperating with the Russian authorities to move over from the SWIFT system to cryptocurrencies.
“[IPCEA has already] obliged the Central Bank of Iran to start developing proposals for the use of cryptocurrency. Over the past year or two, the use of cryptocurrency has become an important issue. This is one of the good ways to bypass the use of the dollar, as well as the replacement of the SWIFT system. They [Russia] share our opinion. We said that if we manage to promote this work, then we will be the first countries that use cryptocurrency in the exchange of goods.”
Although the government of Iran has expressed opposition against digital currency trading throughout the past few years, the government’s adoption of cryptocurrencies as an alternative financial system to central bank-backed fiat money may ultimately lead to the embracement of digital assets by the Iranian population.
Cover Photo by Mahdiar Mahmoodi on Unsplash