Can billions of frozen Iranian assets help the United States reach a deal?

If the precise details of a ceasefire agreement between Iran and the United States – or even a long-term agreement – remain highly uncertain, Tehran is likely to prioritize the return of its frozen Iranian assets abroad. Information available on ongoing negotiations, as well as past instances where Tehran conditioned its approval on the release of funds held outside the country, suggest that this demand will be added to a broader request by Washington to lift all primary and secondary sanctions imposed on Iran. The exact value of Iran’s frozen assets remains unknown, but several estimates put it at over $100 billion (€86.5 billion).

In the past, the Tehran regime has opened foreign currency accounts with major international banks to build reserves to support the value of the country’s official currency, the rial. Subsequent rounds of sanctions have cut off these funds, leading to a steep decline in the rial and complicating Iranian businesses’ ability to pay foreign suppliers in euros, yen, or other currencies. Access to foreign currencies is so crucial that, during a February Congressional hearing, Treasury Secretary Scott Bessent went as far as acknowledging that the United States deliberately caused a dollar shortage in Iran to catalyze protests.

“We created a dollar shortage in the country … which peaked in December when one of Iran’s largest banks collapsed: there was a rush on its ATMs, the central bank had to print money, the Iranian currency collapsed, inflation skyrocketed, and as a result, we saw Iranians take to the streets,” Bessent declared.

Context: Iran has been facing economic challenges due to sanctions imposed by the United States, impacting the country’s ability to access foreign currency reserves and manage inflation.

Fact Check: The article discusses the implications of frozen Iranian assets held abroad and the ongoing negotiations between Iran and the United States to possibly release these funds.