Iran looking to pilot its sovereign digital currency

Iran has been paying a lot of focus to cryptocurrencies going by its recent developments. A recent report states that the country could soon unveil a pilot for a central bank digital currency (CBDC).

According to a publication by the Iranian Labour News Agency, the vice governor of the Central Bank of Iran stated that a CBDC could enable the country to navigate the financial crisis. Iran’s economy has been greatly affected by US sanctions.

An Iranian CBDC

Iran first ventured towards CBDCs in 2018. The executive division of the central bank, Informatics Services Corporation, started the development of Iran’s sovereign digital currency. With the development phase being complete, a pilot phase could soon commence.

The Iranian central bank has not provided details about when this will happen. However, if this phase is launched soon, Iran will be among the first countries to pilot their CBDC projects.

Reports state that Iran’s CBDC was created through the Hyperledger Fabric platform. This platform is hosted by the Linux Foundation, but the company has also not issued a statement regarding the same.

Iran focusing on crypto initiatives

Iran has turned towards crypto as a way of aiding its economy. The country was among the first that legalize Bitcoin mining. However, Bitcoin mining in Iran has not been a smooth ride, given that miners have to deal with recurrent outages.

Last week, the Central Bank of Iran and the Ministry of Trade, Alireza Peyman- announced the launch of a trading system that will allow digital currencies in international trade. According to the head of Iran’s Trade Promotion Organization (TPO), this payment option will be available within two weeks.

Peyman-Pak added, “We are finalizing a mechanism for operations of the system. This should provide new opportunities for importers and exporters to use cryptocurrencies in their international deals.” Despite these initiatives to embrace the use of cryptocurrencies, the regulatory framework in Iran has not been clear. Towards the end of 2021, one of the leading blockchain firms in Iran expressed concerns over the enforcement of crypto regulations. At times, the government has shut down electricity access to miners.

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