The Central Bank of Iran (CBI) plans to roll out a digital currency pilot phase soon. According to a top CBI official, the digital currency will benefit the country by helping to resolve financial inconsistencies and bring decentralization. Iran has been working on the digital currency since 2018.
Iran’s central bank still on its quest to integrate a national cryptocurrency
According to a report from the Iranian Labour News Agency, the Central Bank of Iran will roll out the country’s cryptocurrency for testing shortly. Mehran Moharamian, the CBI’s vice governor for IT affairs disclosed this according to the report. Moharamian adds that the CBI considers the launch necessary as cryptocurrencies are a solution for resolving inconsistencies and decentralizing resources.
Iran’s Central Bank Digital Currency (CBDC) will be called the digital Rial and will be pegged to Rial, the country’s currency. Development on it began in 2018 after the Informatics Services Corporation (ISC), the executive arm of the Central Bank of Iran in charge of operating the country’s banking automation and payment services network, was tasked with developing a national cryptocurrency. At the time, the CEO of ISC, Seyyed Abotaleb Najafi, said the digital Rial will first be tested with commercial banks.
…in the first phase the blockchain banking infrastructure will be granted to Iranian commercial banks to use it as a token and payment instrument in transactions and banking settlement, he stated.
So far, the CBDC has been developed using the open-source Hyperledger Fabric technology, the blockchain framework initially developed by IBM and Digital Asset, a New York-based industry startup. The Hyperledger Fabric is now code hosted by the Linux Foundation, which also leads the Hyperledger blockchain consortium.
Iran seems to have grand plans for crypto
The CBDC announcement is only the latest push Iran has made into greater cryptocurrency adoption. The Iranian deputy minister for Industry, Mines, and Trade and head of Iran’s Trade Promotion Organisation, Alireza Peyman-Pak, recently revealed that the CBI had agreed to let cryptocurrencies such as Bitcoin be used for international settlements. He added that the agreement may be implemented in as soon as two weeks at the time and would benefit the country greatly as cryptocurrencies were widely adopted among their trade partners.
Significantly, Iran has been gravitating towards alternative methods of facilitating international trade and boosting their local economy since the US placed heavy sanctions on them. Cryptocurrencies being permissionless can theoretically allow Iran to circumvent the difficulty in accessing US dollars on the international market due to the sanction and has been often cited as Iran’s motive crypto adoption. However, the country is yet to work out the kinks of sustaining crypto adoption as they have been off and on in allowing Bitcoin miners to operate in the country. At the moment, Bitcoin miners are facing a ban that will last till March.
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