The economic embargo set by the United States against Iran left many students unable to pay their university fees abroad. Many Iranian students at the UK universities face suspension because they cannot receive money from home via bank transfers. Determined to complete their studies, they found an alternative source of funding: Bitcoin.
A Difficult Situation for Iranian Students
The aggressive policy of Iran on weapons led to severe sanctions imposed by the United States. On November 5, the Swift banking transaction network agreed to exclude Iran from its transactions system. This means that residents in Iran cannot send or receive money via bank transfers.
This situation left many young Iranians studying abroad unable to pay their tuition fees. They are already receiving letters of warning from the universities where they are enrolled. In an instance reported by The Guardian, the University of Reading advised one of its Iranian students to travel back home and return with cash.
However, this is not a viable solution. Young Iranians may be targeted by customs officials for carrying large quantities of cash with them, in the range of thousands of pounds. In other cases, the students’ parents are travelling to the UK to bring the tuition fees to them.
Bitcoin – a Potential Solution to the Students’ Plight
Since fiat currencies are quite difficult to obtain in these conditions, young Iranians decided to turn to cryptocurrencies. Many of them ask their families to send Bitcoin and other digital currencies to pay university fees and usual daily expenses.
This option shows that cryptocurrency is a viable alternative as method of payment for people in difficult situations. Iranian students have a hard time opening regular bank accounts in the UK, apart from the ban on receiving money from home. They turned to cryptocurrencies in an attempt to bypass a sanction which, aside from putting the future of Iran’s economy into question, has a strong negative impact on regular people, as well.
Bitcoin, as an independent currency, outside the control of traditional financial institutions, can help Iranian people have access to funds. In a separate instance, a country struggling with a severe economic crisis, Venezuela, turned to crypto, as well. Since their fiat currency is virtually worthless, they developed a cryptocurrency, the petro, backed by the country’s oil reserve.
Is Bitcoin Truly Independent from Control?
Despite its resistance to censorship and portability, Bitcoin is still subject to certain regulations. And exchanges are trying to comply with existing laws and rules, in order to maintain their legal status. For this reason, several international cryptocurrency exchanges agreed to comply with the US sanctions and stopped serving Iranian clients.
While most of the countries recognise cryptocurrencies as stores of value, there are still unclear aspects. More precisely, there are still debates whether cryptocurrencies represent a currency or a commodity.
This means that sometimes, as in this case of the economic embargo imposed against Iran, some companies in the crypto ecosystem must comply with certain decisions made in the traditional world of finance.
In the meantime, UK universities and authorities declared they are working on a case by case basis to help Iranian students finish their studies.