Iran has finalized the development of its national cryptocurrency, which is backed by the local fiat unit, the rial. Once the Central Bank of Iran (CBI) approves its use, the yet-to-be-named digital currency will then be issued to banking institutions for testing in payments, internal and interbank settlements according to local media reports.
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Banks to Be Granted State Digital Currency
Speaking to Ibena, an Iranian news agency affiliated with the country’s central bank, chief executive officer of Informatics Services Corporation (ISC) Seyyed Abotaleb Najafi said the state-backed cryptocurrency “can be used in a distributed and one-to-one framework for transferring without any institute’s interference.”
The CBI contracted Najafi’s company, an Iranian banking and payments solution provider founded in 1993, to design and develop a national digital currency for use in expanding banking system services and, of course, to circumvent the marauding U.S. economic sanctions against the oil-rich Middle East country.
Najafi stressed that the state cryptocurrency is still in a pilot phase. It has primarily been developed to explore the capability and usefulness of digital coins and the blockchain technology that underpins them in facilitating financial payments, bank-to-bank settlements and retail banking. He explained:
After getting Central Bank of Iran’s approval [it] will be used in the country’s banking system … 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.
Rial-Backed Cryptocurrency to Neutralize Sanctions
On Nov. 5, the U.S. announced severe economic sanctions against Iran that, with the exception of just eight countries, cut the rest of the world off from the country’s oil, shipping and
