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Iran Launches Public Pilot for its Central Bank Digital Currency

The Central Bank of Iran (CBI) is leading the deployment of Iran’s central bank digital currency (CBDC), the digital rial. Iran is entering a public pilot phase of its digital rial, aiming to integrate this digital currency into the economy. The pilot will initially be limited to banking users and tourists on Kish Island, providing a controlled environment to facilitate digital payments.

The pilot phase is set to commence on June 21, marking a significant step in Iran’s exploration and adoption of digital currency technology. This trial will be conducted on Kish Island, a significant location chosen by the CBI for its initial implementation.

The digital rial operates on blockchain technology, enabling quick and secure online transactions. It is designed to reduce reliance on physical cash and ensure a transparent record of transactions on the blockchain. During the pilot, transactions can be made by scanning a barcode generated by the designated software, allowing immediate fund transfers without the need for interbank settlements.

CBDCs are gaining traction globally as nations explore digital versions of their fiat currencies to enhance their economic frameworks and adapt to the digital economy. The digital rial is intended to support new business models, particularly in e-commerce, by leveraging programmable money capabilities. This initiative by Iran is part of a broader global movement where countries like India, China, Japan, the UK, Russia, and recently Ethiopia, are testing or deploying their own CBDCs. Notably, Nigeria has already moved to mainstream adoption of its eNaira CBDC, showcasing a successful transition to digital currency. The adoption and trial of CBDCs reflect a significant shift towards digitalization in the global financial landscape, driven by the need for more efficient, secure, and innovative monetary transactions.

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