Senior Research Consultant Mehrdad Emadi at UK-based Betamatrix said ILNA news agency that United States is concerned that INSTEX will become a successful model for other countries.
"INSTEX could challenge U.S. sanctions and eliminate the limitation of using dollar for Iran in its trade exchange," he added.
"Services offered through INSTEX (Instrument in Support of Trade Exchanges) will generate positive trade and finance gains to Iran in a short period," Iranian economy expert told.
The United States is using penalties as its tool to enforce renewed sanctions, while Europe is relying on compensation as its tool in defending Iran, but Europe is not likely to have the financial resources to further its policy, Emadi noted.
On Jan. 31, three European countries – France, Germany and the UK (shortened as E3) – officially announced the creation of the Instrument in Support of Trade Exchanges (INSTEX), a special purpose vehicle, to allow them bypass US sanctions on trade with Iran. INSTEX facilitates non-dollar trade with Iran, allowing European companies to trade with the Islamic Republic without being hit by the sanctions.
He said that in other words, the successful performance of INSTEX means that Euro could become the main currency in world market and it does not need US Treasury licenses. "leading European banks are still uncertain in doing business with Iran so companies need legal guarantee to have business relations with Iran."
Ambassadors from France, Germany and the UK to Iran released a joint statement last week underscoring the commitments of their governments to launch the first transaction soon with Iran using the much-touted EU financial mechanism.
During his visit to Iran earlier this week, German Foreign Minister Heiko Maas said INSTEX will be operational soon but did not give a timeline.