Iran’s plans to launch a national cryptocurrency continue to move forward. Just a few weeks after lifting the ban on bitcoin and other digital currencies, the country announced the launch of PayMon, a local digital currency that is backed by national gold reserves.
Apparently, the token will be used to avoid financial sanctions imposed by Western countries to the country, specifically from the United States. During an interview with the Russian news outlet Sputnik, the blockchain specialist Hamid Reza Shaabani explained that the cryptocurrency has been developed on top of the Stellar network.
Individuals and companies in the country will be able to use the digital asset. In order to give the digital asset some value, he explained that the virtual currency will be backed by the gold reserves of the country. However, the information regarding the details and implementation have not yet been confirmed.
Before using it, users will have to complete a Know-Your-Customer (KYC). The main intention is to combat money laundering and also terrorism financing. There are several regulatory agencies all over the world that are regulating the market with increased KYC and AML policies.
According to Shaabani, PayMon will be entering the market through special exchange offices. A small part of the tokens will be used to finance the project.
This is not the first time that a country issues a local cryptocurrency. In 2018, Venezuela launched the so-called Petro. This national cryptocurrency is backed by natural reserves from the country such as gold and oil. Until now, Venezuela struggled to increase the adoption of the Petro in the country. Other nations such as Argentina and Poland have already rejected a proposal to receive Petro as a means of payment for food and medicine.
As Venezuela, Iran is being affected by sanctions imposed by Western countries regarding its Nuclear plan. Meanwhile, Venezuela is under the dictatorship of a socialist government that has brought poverty and destroyed the whole country.