On September 22, Iranian Chamber of Commerce, the Central Bank of Iran (CBI) finalised plans to introduce its digital currency known as “Crypto-Rial”. Blockchain technology will be used by the Central bank to convert Iranian Rial banknotes into cryptocurrency.
According to CBI Governor Ali Salehabadi, “The bank has in place the infrastructure and rules for the crypto-rial. The cryptocurrency is planned as a new type of national currency, like banknotes and coins, but fully digital.”
One of the primary benefits of the crypto-rial highlighted by the CBI is its high level of security, in addition to its increased usability.
According to the announcement from Iran’s Chamber of Commerce, “Crypto-rial has been designed in a way that it is easy to track and even if the data on the smartphones are hacked, the crypto-rial can be tracked.”
The CBI believes that the crypto-rail will enhance financial inclusion in the nation and act as a tool to boost the economy’s ability to compete with other stable currencies on a global scale.
This latest development in Iran demonstrates the nation’s growing interest in cryptocurrencies and blockchain technology. Early in 2022, the Iranian government approved the use of cryptocurrency through the Central Bank’s crypto platform for the settlement of cross-border payments. The first cryptocurrency transaction was used to settle a $10 million import deal on August 9.
The crypto rial has also been considered a way to fight Iran’s pervasive corruption. The Central Bank has been promising to test the CBDC all year, and the development of the crypto rial started in 2018.
According to Al Jazeera, the IBM open-source distributed ledger technology platform Hyperledger Fabric was used to create the Borna platform, which will be used by the CBDC.
According to the news agency, banks will exchange paper rials for electronic ones. The central bank will choose the banks to participate in this process.In order to help modernise the antiquated Iranian banking system, Borna was adopted in 2019. The Borna platform will allow for the provision of fee-based financial services, according to an Al Jazeera source, though that won’t be included in the current trial.
Although it is illegal to use cryptocurrency inside Iran, Iranians started doing so in August to pay for imports, raising concerns among Iranian businesses about the absence of cryptocurrency regulation. Similar requests have previously been made by the Iran Blockchain Association.
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