Iran to Pilot Nat’l Cryptocurrency

October 18, 2021
banking

T he governor of Central Bank of Iran said on Sunday the national cryptocurrency will enter the pilot stage in the near future, without providing further details.

Speaking to reporters on the sidelines of his first meeting with lawmakers, Ali Salehabadi added that central bankers are currently studying the risks and benefits involved.

'The pilot trial will start, once the Money and Credit Council approves it,' IRIB News quoted him as saying.

The national cryptocurrency was not the only topic discussed by the CBI governor and lawmakers in their Sunday meeting.

They also agreed to form a joint commission to finalize the long-awaited plan for reforming the country's central bank law, as soon as possible.

The top banker did not elaborate on the 'national cryptocurrency', as it might be in line with earlier plans for the development of a national cryptocurrency.

In 2018, Informatics Services Corporation, the executive arm of the Central Bank of Iran in charge of operating the country's banking automation and payment services network, was tasked with developing a national cryptocurrency. The company’s officials later said the Iranian cryptocurrency has been designed using the Hyperledger Fabric platform.

It is a blockchain framework implementation and one of the Hyperledger Company's projects hosted by Linux Foundation.

The national cryptocurrency was developed on a private blockchain, meaning that it cannot be mined by the general public unlike popular cryptocurrencies like bitcoin that have been developed on public blockchains.

Nevertheless, the project has had no major updates. Instead, central bankers recently announced that a plan was underway for the issuance of a “crypto-rial” as a central bank digital currency.

CBI officials have said that the crypto-rial is a digital form of money that will be circulated by the central bank and not a cryptocurrency that could be used for small, cashless transactions.

Working Group

The research arm of Iran's Parliament has repeatedly called on a host of decision-making bodies, including the central bank, to join forces and employ the potentials of digital money and blockchain technologies for devising regulations that help circumvent US sanctions and boost the economy.

According to Salehabadi, a working group is set to be formed to clarify the standpoints of the central bank and the government regarding cryptocurrencies.

Virtual currency mining is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019. However, trade in crypto is banned even though the central bank recently said banks and licensed moneychangers can use the digital currency mined by authorized miners in Iran to pay for imports.

The rising interest of Iranians in mining and trading cryptocurrencies has prompted authorities to craft a roadmap for crypto business. However, the issue of cryptocurrencies, experts say, is more complicated than previous regulatory challenges. As a result, no state body wants to get involved for fear of any likely problems.

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