Recently, Iran has been in the process of creating its national Cryptocurrency. The Central Bank of Iran (CBI) contracted the Informatics Services Corporation to develop the new Crypto on its behalf. The latest news from the oil-rich country claims that the development of the Rial-backed national Crypto is complete and is awaiting approval from CBI.
The Development of Iran’s National Cryptocurrency Completes
Iran has already completed the creation of a national altcoin that will be backed by the country’s fiat currency, Rial according to the local media. However, the Crypto will not be available until after getting approval from the Central Bank of Iran (CBI). After the approval, the local financial institutions will get a chance to test its payments.
CBI contacted the Informatics Services Corporation (ISC) to create the new national Cryptocurrency on its behalf. The altcoin will be used in the country’s banking system. It has been confirmed that the developers have used open-source Hyperledger Fabric technology. Digital Asset, a New York-based industry startup, and IBM, first developed the technology.
ISC is a CBI-affiliated body. According to Seyyed Abotaleb Najafi, the CEO of the agency, the bank asked them to develop a coin that will help in expanding the banking system services and enable the country to circumvent sanctions. He said that the coin will be made available to the local commercial banks once it has been approved by CBI. He added that the coin will be used for banking settlement and in transactions.
The Need For A National Cryptocurrency In Iran
Since President Trump’s government imposed sanctions on Tehran, the country has been mulling the idea of using Cryptocurrencies and developing a national altcoin. A few weeks ago, the head of Iran’s Civil Defense Organization Brigadier General Gholam Reza Jalali said that the use of the virtual currencies provides many opportunities, especially as the country is experiencing economic difficulties.
The Brigadier General noted that the use of Cryptocurrency can support untraceable banking operations thereby helping the country to bypass the sanctions. He said that by turning to the Cryptos, the country could be able to overcome its reliance on U.S. dollar-based payment. According to the senior official, dollar enables the US to control SWIFT operations for different countries.
Will National Cryptocurrencies Solve Economic Challenges?
Although the popularity of Cryptocurrencies has been growing since the launch of the first coin a decade ago, the innovation has attracted a special interest, especially in countries experiencing difficult economic times. Iran and Venezuela are among the first countries to support the creation of national Cryptocurrencies publicly and invest in the same.
At the beginning of this year, Venezuela became the first country to launch a national Cryptocurrency, petro. Initially, the government said the coin will be supported by the country’s oil reserves but has added other minerals recently. The country is hopeful that the new coin will enable it to circumvent the economic sanctions imposed by the US and its close allies.
Iran has also been at odds with President Trump’s administration. The sanctions by the world’s largest economy have seen the local currency, rial depreciates significantly in the last few months. This has led to an increase in the use of the Cryptocurrencies in the country. The government has come forward and proposed the creation of a national Crypto to help the country circumvent the sanctions.