Brave New World Investments AB, a major Swedish investment firm which focuses on funding companies and projects in the Middle East, has decided to accept bitcoin deposits to purchase the Iranian rial to invest in publicly listed companies on the Tehran Stock Exchange (TSE).
The vision and strategy of Brave New World (BNW) is significantly different to that of most global investment and hedge firms across the world. The vast majority of investment firms target markets or regions like Hong Kong or Singapore that have already undergone a technological and financial revolution and are at the forefront of their respective industries.
Investment firms often distance themselves from regions like the Middle East and Iran that are still quite early in their technological development and innovation because it is tough to speculate the growth of these regions, especially due to various international sanctions made against them that disallow trading and financial activity between certain countries.
Iran is one of the few countries that are being affected by sanctions made by the US government. Even for countries in Europe, it is challenging to trade and invest in Iran and the country’s local markets because of the financial barrier set by the US authorities and regulators. Therefore, companies like BNW need alternative channels or financial networks to transfer money to Iran with efficiency and a high level of security. Also, as BTCManager reported on January 31 that Iran had moved to dump US dollars, opening up a greater acceptance to cryptocurrency in the Islamic republic.
Mikael Johansson, co-Founder & Executive board member of BNW, revealed that the investment firm currently doesn’t have a Swedish bank account and doesn’t intend to obtain one as the company just does not see the purpose and benefit of using it. Since most international banks including EU-based financial service providers don’t process payments to Iran, Johansson stated that the business operates solely on bitcoin and nothing else.
“Now we simply do not have a Swedish bank account. However, we do have an Iranian bank account for the equity investments. We pay our bills, shareholder dividends, Iran deposits – everything – in cryptocurrencies,” said Johansson.
It is hard to justify bitcoin as a short-term investment tool due to the currency’s volatility rate. Normally, bitcoin fluctuates at the range of 5 to 15 percent in some days when the support level is not met by the market.
However, bitcoin as a digital currency and digital gold, more like a long-term safe haven investment and asset, is efficient. More importantly, as security and bitcoin expert Andreas Antonopoulos emphasized in a talk, if a user utilizes bitcoin as a payment facilitation tool or a settlement network, the volatility in bitcoin price is not necessarily an issue.
“Bitcoin as a currency, as a means of exchange, the way I use it for getting paid for my job, works at $200, at $2,000 and at $20. It doesn’t change for me,” explained Antonopoulos during a discussion on the hard fork contingency and stability of bitcoin price.
With bitcoin, a digital currency and financial protocol that is decentralized and free of regulation, BNW plans to continue its investments in Iran. Its shareholders in Europe see massive potential in the Iranian energy and technology markets and are also confident that the Tehran Stock Exchange is largely undervalued.
“A few US financial sanctions are still active that are effectively excluding large parts of the country’s financial industry from the international financial industry. Despite that, the country is on the doorstep of a payment revolution along with the coming technological advances. There are also asset management technical reasons for investing in Iran. The Tehran Stock Exchange is at large undervalued with an average price-earnings ratio of seven (2016 figures),” a BNW spokesperson stated.