The “Crypto Rial” plan is underway in Iran.
Iran’s national cryptocurrency is about to enter the pilot design phase for a state-backed, or rather “sovereign” digital currency.
Iran’s Crypto Rial project
Newly-elected Central Bank of Iran (CBI) governor Ali Salehabadi has spoken out on the project.
He said he already had a first fruitful meeting with legislators and regulators. The aim is to study all the possible benefits on the internal economic return of this initiative. The project is based on the previously discussed steps of developing a national cryptocurrency.
At the same time, the country’s monetary authority is organizing to open a new dialogue on what should be a reform of the legislation. Even though the pilot phase has already been set up, Al Salehabadi did not provide any further details.
A non-decentralized cryptocurrency
From a report published in 2018 by the Informatics Services Corporation, the Central Bank of Iran’s branch had already been tasked with developing a state-owned digital currency. And a prototype was already under consideration. Through the Hyperledger Fabric platform, a national digital version was being designed.
The Rial would be designed on a private blockchain. However, this differs from the normal process of cryptocurrencies such as Bitcoin, which are based on public blockchains. The Islamic State’s digital currency will not be mined.
The lack of information about the development of this project has focused the attention of those most interested. And when new hints about the future development of this “crypto rial” were given, officials in charge specified the type of digital currency.
The Iranian cryptocurrency will be government-issued and, although digital, will not be decentralized but will only be able to be used for small official transactions defined by the CBI.
Cryptocurrencies in Iran
The new commission created to prepare amendments regarding the Central Bank of Iran will also rule on cryptocurrencies. The members of the Majlis will quickly reform the legislation regarding the country’s economic-monetary plans.
Al Salehabadi has assembled a group of experts to legislate on digital currencies.
Tehran’s executive authorities have long allowed investments in cryptocurrencies, but only to authorized banks and money changers. This authorization covers the use of coins minted in Iran to pay for imports.
Lawmakers, however, have opposed these restrictive policies. Most of them believe that different laws and new regulations would help the Iranian economy.
For the CBI governor, it is important to maintain the value of the national currency by regulating various forms of monetary transactions within the country.
Al Salehabadi believes that the introduction of a national cryptocurrency could only have positive effects on the economy. What will be discussed now is the internationalization of the Rial and the reform of the monetary system.