HRF’s Weekly Financial Freedom Report #18

Iran | Currency Plunges to Historic Low

Iran’s currency, the rial, reached a historic low, trading for 613,500 rials to the dollar. This depreciation comes during a 46% inflation rate that has seen the value of the rial fall 20x against the dollar since 2015. Amid these challenges, Iranian writer Marius Farashi Tasooji indicates in a detailed new report that a growing number of Iranians are adopting Bitcoin. His analysis suggests that approximately 25% of Iranians have turned to cryptocurrency, with Bitcoin being the most popular choice. In the context of a currency crisis and tyrannical restrictions, Bitcoin enables Iranians to protect their savings from inflation, overcome government censorship, receive their salaries, minimize their tax burdens, and participate in the global economy. “Iranians are heavily involved in Bitcoin because we have the weakest economy in history,” one interviewee said. These stories and data emphasize Bitcoin’s role as a financial lifeline for people living in some of the most repressive places on earth.

SWIFT | Plans to Launch CBDC Platform

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global messaging system for banks and financial institutions, has announced it’s building a global central bank digital currency platform. The system aims to enable interoperability between various CBDCs, regardless of underlying technology. SWIFT has targeted a 12 to 24-month timeline for launching this global platform. By establishing a direct link between citizens and central banks, CBDCs open the door to potential financial freedom violations, such as the freezing of bank accounts or transaction censorship. According to HRF’s central bank digital currency (CBDC) tracker, more than 120 out of 193 governments worldwide are exploring, building, or have already launched CBDCs, and most of those governments are authoritarian. The most advanced CBDC projects have been rolled out under regimes in China and Nigeria. To learn more, visit HRF.org/cbdctracker.

Togo | Constitutional Change Weakens Electoral Processes

In Togo, recent constitutional amendments have altered presidential terms from two five-year terms to a single six-year term, lengthening the President Faure Gnassingbe’s tenure by a year while limiting the length of future presidents’ tenures. The new constitution also transitions Togo from a presidential to a parliamentary system, giving parliament the undisputed power to elect the president rather than the general public. These changes are expected to prolong Gnassingbe’s 19-year rule and potentially extend his governance until 2031, assuming he’s re-elected by parliament (in what is predicted to be a rigged election) in 2025. “A staggering 97 percent of the country’s citizens have lived under the shadow of a single ruling dynasty,” Togolese democracy activist Farida Nabourema said. “The Gnassingbés do not just run elections; they are the elections.” She has long been an outspoken critic of the monarch, fighting against Africa’s longest-standing dictatorship since the age of 13. The Gnassingbé regime uses financial repression as a standard tactic to enforce its rule, freezing the bank accounts of anyone who dares protest, organize, or speak out against it.

Israel and Palestine | Threat of Banking Isolation

Financial freedoms of West Bank Palestinians are already very weak, as they suffer under the rule of authoritarian leader Mahmoud Abbas. A new risk comes from outside, as Israeli finance minister Bezalel Smotrich announced plans to sever ties between Israeli banks and Palestinian banks in the West Bank, potentially isolating Palestinian accounts from the global banking system. Since the West Bank’s economy uses the Israeli currency, the shekel, individuals living there are reliant on the Israeli government for their financial connection with the world. Smotrich’s decision would halt the ability of Israeli companies to process Palestinian checks and payments, while West Bank workers will not be able to receive wages unless paid in cash. Furthermore, Palestinian import and export operations as well as tax funds — all of which go through Israeli ports and institutions — will be affected. Unless Israeli Prime Minister Benjamin Netanyahu repeals the decision made by Smotrich, financial flows and citizen livelihoods in Palestine are at risk, highlighting the need for independent and neutral monetary rails that can remain functional for an economy and its citizens even amid geopolitical tensions.

South Sudan | Crackdown on Forex to Stabilize Currency

To stabilize its rapidly depreciating currency, the pound, South Sudan is cracking down on unlicensed forex dealers in the capital city of Juba. The pound has fallen sharply in value, from 1,000 pounds to the dollar earlier this year to 1,600 pounds to the dollar this week (with weaker rates observed on the black market). “Anybody selling dollars either on the streets or in their houses or in their shops or any corner anywhere will be asked by law enforcement, if you are selling, show me your license,” James Alic Garang, governor of the Bank of South, said. This crackdown on forex dealers, which encompasses a large group of people in search of stronger monetary technology, comes amid soaring prices of basic goods that have tripled in the African country while government revenues have plummeted following a ruptured oil pipeline. As Sudan’s currency crisis intensifies, officials have moved to reduce the exit ramps, leaving their citizens to bear the cost of the rapidly depreciating currency.