Tehran, Iran – When a massive natural disaster strikes in most countries, the global community takes notice, comes together and sends humanitarian aid, including financial donations.
But sending aid to heavily sanctioned Iran isn’t so simple.
After Iran suffered devastating floods this spring that left an estimated two million people in need of humanitarian assistance, the Iranian Red Crescent Society (IRCS) said that United States sanctions were impeding its relief efforts – including its effort to receive foreign financial aid for flood victims.
Frustrated by the spectre of politics interfering with humanitarian needs, members of Iran’s crypto community came together to create IranRescueBit, a blockchain-enabled online platform for facilitating aid donations made in cryptocurrencies.
Launched this week, the platform, which was developed by volunteers independently of the government, will accept donations in bitcoin, Ethereum and Litecoin.
Anonymous and decentralised
The US reimposed punishing economic sanctions on Iran last year after US President Donald Trump unilaterally withdrew from Iran’s nuclear deal with world powers.
As a consequence of US sanctions, Iran was booted out of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – the Belgian-based financial messaging system that facilitates cross-border payments.
After devastating floods this spring caused billions of dollars in damage in Iran, killing at least 78 people and displacing hundreds of thousands, IRCS chief Ali Asghar Preyvandi said the organisation couldn’t receive financial donations from abroad because its bank accounts had been cut off from SWIFT.
“We employed a number of bank accounts connected to SWIFT, which we used for receiving international aid,” he said in April as floodwaters surged. “But at the moment, these accounts are subject to sanctions.”
Unlike traditional financial transactions, those made with cryptocurrencies don’t need to be verified by a centralised authority such as SWIFT. That’s because cryptocurrencies enable so-called “peer-to-peer” transactions that are verified by a global, decentralised network of computers beyond the control of any single entity or government.
Decentralisation also enables transactions to be made anonymously.
“Humanitarian issues should not fall victim to political agendas because when that happens, average people always end up sustaining at times irreversible damages,” IranRescuebit executive director Hamed Salehi told Al Jazeera.
“We hope that IranRescueBit can turn into a platform that could be employed either by the community or by the IRCS should the need ever arise again in the future.”
Examples of sanctions preventing the flow of humanitarian goods – including life-saving medicine – to Iran have been well-documented. But US officials dispute such claims.
Last month, the US Department of State released a video in which US Special Representative for Iran Brian Hook said “the real issue preventing access [to medicines]is the regime itself,” and that any claims the US sanctions humanitarian aid are a “myth”.
‘None of us are political’
Salehi told Al Jazeera that the campaign has set an initial target period of one month for receiving crypto donations. After this, the funds will be converted into rials using one or multiple credible local online exchanges. They will then be sent to the local bank account of the IRCS.
“None of us are political people, but political barriers drove us to use the technology we know and love to show the world that humanity trumps politics,” said Salehi.
IranRescueBit’s developers have kept Iranian officials abreast of their activities, but say the government has no formal involvement with the platform.
“The only expectation we have of the government concerning this campaign is not to do anything and let it grow organically,” said Salehi.
He added that in the long run, he hopes IranRescueBit will set a positive precedent that can show the Iranian government that cryptocurrencies have wider uses that go beyond mining, trading and illicit activities that are at times associated with them.
Mining and using cryptocurrencies inside Iran has become a hot topic this summer, especially after state actors started cracking down on miners.
President Hassan Rouhani’s cabinet approved cryptocurrency mining as a legitimate industrial activity on August, but critics say the many caveats that came with it may end up suffocating the fledgling industry.