People Mentioned
Partner, Corporate, Calgary
As a two-week ceasefire begins in the U.S.-Israeli war with Iran, a spokesperson for the Iranian Oil, Gas and Petrochemical Products Exporters’ Union has announced its plan to charge a toll on tankers transiting the Strait of Hormuz of US$1 per barrel of oil — in bitcoin. Before the ceasefire announcement, Iran was reportedly charging ships a fee payable in Chinese yuan or stablecoins. Beyond the legality of tolling an international waterway, it has renewed conversations around using cryptoassets to evade sanctions imposed by the United States, Canada and other countries, which could draw massive penalties for any companies that pay the tolls.
Matthew Burgoyne, Chair of Osler’s Digital Assets and Blockchain practice, tells The Logic that any crypto trading platforms that process these toll payments “could be in big trouble” with regulators.
The tolls certainly don’t help with cryptocurrency’s reputation as a tool for criminal activity, Matthew says, and they may lead to increased scrutiny of crypto businesses from securities regulatory authorities. But the fact that bitcoin is involved in such an important and high-profile story is notable in itself.
“It’s now entangled with geopolitics and global trade, which is what you’d expect with a mature monetary network,” he says.
“It’s definitely a consequence of bitcoin’s network effect.”
If you have a subscription, you can read the full article, “Iran tests the limits of sanctions with bitcoin tolls in Strait of Hormuz,” on The Logic’s website.
People Mentioned
Partner, Corporate, Calgary
