Rial Pegged National Cryptocurrency from Central Bank of IranNovember 12, 2018
Iran has finished with the development of national cryptocurrency that is pegged with Rial.
The local media reports from Iran has reported that the development of the national cryptocurrency is already complete and that the Rial will back it. The Central Bank of Iran (CBI) has approved the use of the national cryptocurrency to be pegged to the Rial.
The payments will be tested after issuing it to the financial institutions like banks for interbank and intra-bank settlements.
Cryptocurrency has been creating waves despite economic turmoil. Petro, the digital currency of Venezuela is the significant example in this regard. Petro has been involved in controversial criticisms. And, the Petro has been approved for usage by the court of Venezuela.
Iran will be following the path of Venezuela. Since Iran is facing the side effects of the sanctions from Trump’s administration, cryptos are thought to be of use to circumvent the ban.
The Digital currency for Iran, backed by Rial, is developed by the Informatics Services Corporation. Central Bank of Iran, will be testing the national cryptocurrency. Iran’s Informatics Services Corporation (ISC) is the affiliated body of the central bank.
Open-source hyper ledger fabric technology has been used for developing the crypto. The open-source blockchain framework is that which has been developed by IBM and Digital Asset, the New York-based industry startup. The Linux Foundation hosts the code that leads the blockchain consortium.
Seyyed Abotaleb Najafi, CEO of ISC was approached by CBI to develop the national digital currency to expand the banking system services in a way to fulfill purposes like circumventing the sanctions.
The cryptocurrency will be used in the country’s banking system after approval from the Central Bank of Iran. The Iranian Commercial Banks will be using the token and the payment instrument in banking settlement and other transactions.
The need for crypto in Iran has increased dramatically. Brigadier General Gholam Reza Jalali, the head of Iran’s Civil Defense Organization has to state that cryptos are providing a great opportunity during the economic turmoil.
This mode of currency for payment systems is good because they help bypass certain transactional sanctions. Iran is expecting to bring down its dependence on the USD by bringing in cryptocurrency. Thus, it will be easy to use cryptos for international transactions.
The major problem with the USD is that it is important in SWIFT operations. With the coming of the crypto, it is going to be useful in reducing the dependency on the crypto. Dollar dependence will be thus reduced by replacing it with cryptocurrency.