Iran is planning on introducing a digital currency, which it has dubbed the crypto rial and the government in Tehran is gearing up for its launch. The monetary authority of the country is hoping to introduce a pilot version of the digital currency in the next two months.
Crypto Rial is on its way
Last Friday, Ali Salehabadi, the Governor of the Central Bank of Iran (CBI) disclosed that the Iranian authorities were working on the measures necessary for launching a pilot version of the crypto Rial. According to the CBI’s governor, they want to make it happen in Shahrivar, a month that begins on August 23rd, in accordance with the Persian calendar.
The top banking official stated that the digital currency of Iran would be different from the other decentralized cryptocurrencies that are available globally. He stated that the purpose of developing the crypto Rial was primarily to replace the bank notes that are currently in possession of the people.
The governor of the Iranian central bank further revealed that initially, the crypto rial would only be made available in one region of the Islamic Republic. Eventually, they will introduce it in other areas in the future, the time for which has not been specified as yet.
Details about the CBDC
The Iranian monetary authorities have been working on the development of the crypto rial for quite a while. Back in April, the CBI had first announced that they would launch a central bank digital currency (CBDC). They had informed banks in the country, along with other credit institutions, about the regulations that will be applicable to the CBDC.
These include details of its minting as well as distribution. The crypto rial will only be issued by the monetary authority and it will determine the maximum supply as well. Earlier reports had disclosed that a distributed ledger system was used for powering the coin and the authorized financial institutions that have the capability of offering smart contract support will maintain it.
The CBI’s role
The Central Bank of Iran has asserted that the provisions that are applicable to the emission of coins and banknotes in the country will be able to the new Iranian currency and it will only be available for conducting transactions within the borders of Iran. Moreover, the economic and financial impact of the digital currency would be monitored by the CBI in order to ensure that it does not negatively affect their monetary policies.
The central bank went as far as saying that the crypto rial would come in handy in establishing crypto presence in the country, as payments in digital currencies like bitcoin and others are not permitted. This announcement in Iran about the pilot version of a digital currency comes at a time when several countries around the world are also working on their own central bank digital currencies (CBDCs). Countries like China have made a great deal of progress, while others are also catching up and developing their own.