The Central Bank of Iran (CBI) plans to launch a central bank digital currency experiment soon. According to top CBI officials, the digital assets will benefit the country by helping resolve financial inequalities and decentralization. Iran has also been working on the digital asset since 2018.
Based on a report from the Iranian Labor News Agency, the Central Bank of Iran will launch the country’s CBDC and test it in the near future. CBI vice -governor for IT affairs Mehran Moharamian has also revealed this. Moharamian also added that the CBI considers the launch very necessary as the digital currency is the solution to resolving the inequality and decentralize it.
The Digital Currency of the Central Bank of Iran (CBDC) will be called the digital Rial and will be pegged to the Rial. The development of the CBDC began in 2018 after Informatics Services Corporation (ISC), the executive arm of the Central Bank of Iran responsible for handling the country’s banking automation and payment services network, was tasked with developing the national digital currency. In addition, ISC CEO Seyyed Abotaleb Najafi said the digital Rial would be tested first with commercial banks.
He added, "… in the first phase of the blockchain banking infrastructure will be provided to Iranian commercial banks to use it as a token and payment instrument in banking transactions and settlements".
To date, CBDC has been developed using open source technology from Hyperledger Fabric, a blockchain framework initially developed by IBM and Digital Asset, a New York -based industry start -up company. Hyperledger Fabric is currently hosted by the Linux Foundation, which also leads the Hyperledger blockchain consortium.
The announcement of the CBDC is just the latest push made by Iran to adopt a digital currency more widely. Iran’s Deputy Minister of Industry, Mines and Trade and head of Iran’s Trade Promotion Organization, Alireza Peyman-Pak, recently revealed that the CBI has agreed to allow digital currencies like Bitcoin to be used for international payment settlement. He added that the agreement is likely to be implemented within two weeks and will be of great benefit to the country as digital currencies are widely adopted among their trading partners.
Significantly, Iran has tended to alternative methods to facilitate international trade and boost the local economy since the US imposed heavy sanctions on them.
With a digital currency it could allow Iran to circumvent difficulties in accessing U.S. dollars in international markets as a result of the sanctions imposed.
