According to an official statement released by the Central Bank of Iran (CBI), the country is moving ahead with its central bank digital currency (CBDC) plans. Notably, it has already completed its preliminary research for the launch of a potential digital Rial.
The Monetary and Banking Research Institute (MBRI) of the CBI announced that the Iranian CBDC has completed the pre-pilot phase of its development. Mohammad Reza Mani Yekta, head of the CBI office for supervising payment systems, announced the news at the ninth annual conference on electronic banking and payment systems.
In his speech, the CBI head noted that the Iranian central bank plans to increase the scope of the CBDC pilot in the country’s payment system, but doesn’t want to rush its implementation. He also said that the pre-pilot yielded great results and would advance to other ecosystems soon. In his words:
The pre-pilot phase ended successfully with valuable achievements. The project will soon be launched in other ecosystems and will be used by more users.
Additionally, the central bank highlighted that the rules governing a potential digital Rial will align with those established for the Rial banknotes. He also noted that a digital Rial would be distributed among individuals and banks, with the CBDC infrastructure recreating some blockchain features.
According to Mani Yekta, ten banks in Iran have applied to be a part of the CBDC project. Reportedly, some banks like Bank Melli, Bank Mellat, and Bank Tejarat were involved in the experimental phase.
Furthermore, all banks and credit institutions in Iran are reportedly expected to start offering electronic wallets for using the upcoming digital currency. The Iranians started their CBDC plan in January last year following years of initial research since 2017. In September 2022, the central bank started rolling out a CBDC pilot with the aim to improve financial inclusion and compete with global stablecoins.
Sources reveal that Iran’s digital Rial project is also called the “crypto Rial,” and is pegged to the national currency at a 1:1 ratio. The digital currency reportedly runs on a platform known as Borna, which was developed using Hyperledger Fabric, the open-source enterprise blockchain platform established by the US-based technology giant IBM.
The news comes amid the Iranian authorities preparing to hold an official meeting with the Bank of Russia’s governor Elvira Nabiullina, who is expected to visit Iran in the near future. Russia and Iran recently joined hands to work together to create a gold-backed stablecoin that would serve as a payment method for cross-border transactions.
In recent times, several countries have looked forward to adopting CBDCs for a variety of reasons. While most of the nations feel it will be helpful in bringing financial inclusion and saving costs, countries like Russia count on it to be helpful in dealing with the sanctions placed on them. In his visit to Cuba, Boris Titov, commissioner for entrepreneurs’ rights under the Russian president said that Russia and Cuba are similar on the grounds of sanctions imposed on them.
He further mentioned that the cooperation between both nations can turn over the existing mechanism which only accepts dollars for mutual settlements. According to him, numerous experiments are being conducted to find alternatives for settlements and that also includes Rubles.