Central Bank of Iran (CBI) Finalizes Cryptocurrency Development Of Rial-Pegged National Token
Iran Finishes The Development Of Rial-Pegged National Cryptocurrency
Iran’s local media reports that has completed the development of its national cryptocurrency which will be backed by Rial. When the Central Bank of Iran (CBI) approves the uses of national cryptocurrency, it will be issued to financial institutions such as banks to test payments and internal and interbank settlements.
Cryptos has been making waves in countries that are amidsts economic turmoil. Venezuela is the leading example of this phenomenon with their controversial Petro Coins. Iran, which faces major sanction’s from Trump’s administration, has decided to follow the same route. In theory cryptos can be easily used to circumvent the ban.
Developed by the Informatics Services Corporation on behalf of the Central Bank of Iran (CBI), the banking system is planning to make use of a national cryptocurrency. Iran’s Informatics Services Corporation (ISC) a central bank-affiliated body. The crypto has been developed using open-source Hyperledger Fabric technology, the blockchain framework initially developed by IBM and New York-based industry startup Digital Asset. The Hyperledger Fabric is now code hosted by the Linux Foundation, which also leads the Hyperledger blockchain consortium.
The CEO Of ISC, Seyyed Abotaleb Najafi was contacted by CBI to develop a national digital currency for use in expanding banking system services and other purposes such as circumventing sanctions.
“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.”
Iran’s Need For Cryptos Has Been Increasing
A couple of weeks back Brigadier General Gholam Reza Jalali, head of Iran’s Civil Defense Organization said that cryptocurrencies present great opportunities in these times of economic turmoil.
“Cryptocurrencies can help bypass certain sanctions through untraceable banking operations.”
Through cryptos, Iran expects to reduce its dependence on U.S. dollar-based payment rails operated by SWIFT for global commerce. The Brigadier General added:
“Our major problem here is the US dollar, because the United States uses its national currency to control any country’s SWIFT operations, so we should reduce dependence on the dollar and replace it with another currency.”
Notably, recently the value of Rial has been dropping. It had plummeted to 143,000 for 1 USD but ha bounced back to 41,000 rials to the dollar.