Iran Announces State-Controlled Cryptocurrency Plans

Iran Announces State-Controlled Cryptocurrency Plans

The Deputy Director of the Iranian National Cyberspace Center (NCC), Saeed Mahdiyoun, has confirmed that the NCC has plans to implement its own Iranian cryptocurrency. Mahdiyoun is responsible for drafting and presenting regulations for Iran’s Supreme Cyberspace Council. The new cryptocurrency will be controlled by the state.

Purpose of Launch

Iran’s launch follows concerns about threats of sanctions by the United States and could be used as a valid form of currency to make payments between banks, as well as being used as a means for other local payments. It is speculated that the United States’ implementation of recently threatened sanctions is imminent and will likely occur in the near future. The other stated basis for the launch is to enable payments to flow into and out of Iran easier. The Iranian cryptocurrency has been dubbed the digital rial.

Iran is not the first country to launch its own state-controlled cryptocurrency in an effort to avoid sanctions. Venezuela has responded to US-imposed sanctions in a similar manner and has launched its own form of digital currency, the Petro. However, there may be a distinction between the two systems and some experts question whether or not the Petro is truly a cryptocurrency, as it is backed by the country’s oil reserves and is not decentralized. In contrast, the digital rial will be backed by the rial.

Important security measures related to the new digital rial will include the inability for it to be mined. In addition, a private blockchain will be the only means to access records relating to transactions. The digital rial will be developed on the Linux Foundation-led open-source Hyperledger Fabric technology.

Iranian state-run news, IBENA has reported,

The (crypto) infrastructure is supposed to be as an ecosystem available for Iranian banks and active companies in cryptocurrencies area after being tested and reviewed.

Illegal activity, including money laundering, centered around cryptocurrency in the past gave rise to a previous Iranian ban on all cryptocurrency late last year. It is expected from statements made by Mahdiyoun, that the Central Bank of Iran will make an official statement regarding the cryptocurrency by the end of September.

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