Iran is expected to present its state-issued cryptocurrency at the end of this month, in a bid to revive its economy from the shackles placed by U.S. sanctions.
The state digital currency is pitched by the Middle East nation as a means to help circumvent the current financial and trade sanctions placed on the nation by the United States-led Donald Trump government.
According to reports credited to Al Jazeera, an official announcement of the digital coin will likely take place in the capital, Tehran during the country’s two-day Annual Electronic Banking and Payment Systems Conference which begins today – Tuesday, 29 January 2019.
This year’s conference titled “Blockchain Revolution” has the Iranian government focused on developing a sovereign cryptocurrency in response to President Trump’s sanctions which were re-imposed after the U.S. pulled out of a nuclear deal and mutual discussions last summer.
Following these sanctions were stiffer measures to restrict Iranian access to the US dollar hence, nationals cannot pay or receive payments for imports or exports in USD. Also in November, Iran’s central bank was cut off from international banking network, SWIFT (a popular banking/cross-border payment network pitched by crypto enthusiasts to be replaced by Ripple XRP coin payment system soon). See here: …
Further details from the report explain that the new Iranian cryptocurrency will be rolled out in phases. First, a digital token backed by the country’s fiat (Iranian Rial) which will be used for payments between Iranian banks and other institutions in the crypto space. Next up is a possible introduction of a cryptocurrency form of the Rial as a payment instrument for the general Iranian public.
Subsequently, extended work on a cross-border payment system will follow to be used for transactions involving fellow SWIFT restricted or sanctioned countries as expressed by Governor of Iran’s Central Bank; who previously specified that alternative platforms to SWIFT are being worked on.
Other countries hit with finance and trade embargoes include Russia, Venezuela, North Korea and a few other nations. However, this trio have sought out ways to navigate past the effect of U.S. sanctions, with digital currency looking a more likely solution for these countries in the long term; as currently experimented by Venezuela with President Maduro’s – Petro currency and Bitcoin.
Iran looks set to keep up with this emerging digital finance and blockchain adoption trend having signed a trilateral blockchain agreement with Russia and Armenia few days after the second US sanction in November 2018
It is yet to be known if these state-backed or Central Bank backed currencies (CBDC) will totally provide solutions to these economic needs due to their centralization however, their utility and backing as relative to decentralized currencies like Bitcoin, sets them apart from the regular fiat issues.