Iran Sees Opportunity in Cryptocurrency and Blockchain to Tap Tourism Sector

Sanctions imposed by the US on Iran in May 2018 last year had led to many believing that the tourism sector in Iran was going to take a serious hit from these economically punitive actions. This move indeed resulted in a decrease in the number of tourists visiting Iran from Europe, but on the flip side, the devaluation of Iran’s national currency rial turned out to be a silver lining for it. Iran, which is already considered as a cost competitive tourist destination for the visitors has become even more attractive for tourists as rial lost around 60% of its valuation in 2018. This development also pressurized the government and private sector to look into the stalled projects and renewed them with new vigor to reinvigorate the economy.

Among other initiatives, developments relating to blockchain and cryptocurrencies have taken center stage in Iran especially after the US imposed sanctions on the country. A cursory look at crypto projects in Iran reveals that these new innovative technologies have already enthused Iranians to a great extent. The government in Iran is already eying the opportunity which is lying at the intersection of tourism and cryptocurrency sectors, and along with government authorities, the private sector also is looking forward to leveraging crypto and blockchain for the tourism sector.

Challenges and Roadmap

Many experts believe that if Iran manages to tap on this tourism opportunity with the help of cryptocurrency, it would be out of the woes of a slowing economy and cash crunch. Due to prolonged sanctions and virtually no access to international payment systems, Iran faces difficulty in attracting foreign tourists as all the transactions need to be made in hard cash. The new initiative of the Iranian government to use cryptocurrencies for transactions has been led by the Department of Cultural Heritage, Handicrafts, and Tourism Organization (CHTO). The institution is headed by Ali Asghar Mounesan who reiterated the commitment of the government to promote digital currencies in the country earlier in February this year. In July 2018 last year, CHTO had proposed to have a joint digital currency fund with India for the development of the tourism sector. What provides further credence to efforts of the government is the announcement by Iran Electronic Tourism Association which proposed to come up with the state’s own digital currency; however, we are yet to witness any further development in this regard.

Blockchain Application

The adoption of the blockchain will result in a number of significant developments in the tourism sector. The possible application of blockchain could manifest in the areas of identification and security at the airport, tracking of the luggage, reservations, and revenue management. However, the blockchain adoption has to be based on solid groundwork of comprehensive research. Now given the precarious situation of Iran where access to the technology and digital infrastructure is not at the desirable level, the government has a huge task ahead of building digital and technology ecosystem.

Private players, on the other hand, have already started investing and are getting good results in the field of crypto and tourism sector. Although the scale of developments is not large, these are good enough allowing private organizations to remain upbeat about the sector. Take, for instance, IranByBit which is a small startup in the travel field which is offering a range of services including the payments in the digital coins in the travel sector. The startup accepts Bitcoin in addition to accepting cash payments for transactions done on its platform.

The draft proposed by the Iranian government regarding the regulation of cryptocurrencies prohibits the use of Bitcoin for internal payment within the country. The local crypto community is working actively and engaging with various stakeholders in the government to shape a new, more liberal regulatory framework. According to some activists, the government has to change its hard stance on crypto to catalyze its widespread adoption in the country. The entry of other private players into the blockchain sector is very much evident from a host of developments we have witnessed in Iran, of late. The country hosted the 12th Tehran International Tourism Exhibition between February 12 and February 15 and during the event, Rmoney exchange unveiled a new digital currency for the tourism sector. This new system allows all the organizations operating in the tourism sector to sign up on its platform and receive payment from their foreign customers using the cryptocurrency and that too without any kind of fee. The platform also allows the facility to change the cryptocurrency into rials if the companies want to do so. Speaking on occasion, the chief executive officer of Rmoney, Mehdi Naseri, said that the company is looking forward to the developments in the crypto sector and confident of attracting more foreign players and revenues with this new initiative. The top echelon also exuded confidence that these efforts will also result in the generation of more employment opportunities for the youth in the country.

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