The Republic of Iran is moving forward with its plans to set up a national cryptocurrency, while seriously considering lifting its ban on mainstream digital currencies, including Bitcoin and Ethereum, by late September.
According to IBENA, an Iranian economy news agency, the Informatics Services Corporations (ISC), which is affiliated with the Central Bank of Iran, has revealed its plans for the national cryptocurrency in response to the economic sanctions being led by U.S. President Donald Trump.
The crypto will be backed by the local rial currency, and has been designed and developed by the ISC, based on Hyper-ledger Fabric Platform technology. The Central Bank of Iran will determine the volume of issuance, and the currency will be developed on a private blockchain infrastructure and cannot be mined. The initial goal is for the national crypto to become an ecosystem for Iranian banks, including as a token for interbank payment, before later also being used for retail payments.
Iran’s President Rouhani supports the initiative, according to Saeed Mahdiyoun, the deputy director of the Supreme Cyberspace Council (SCC), a government-affiliated agency that is overseeing the drafting of the Iranian digital currency.
“We are trying to prepare the grounds to use a domestic digital currency in the country,” Alireza Daliri, from the technological directorate of the Iranian Presidential Office, told local media. “This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions."
Meir Javedanfar, a lecturer on Iran at the Interdisciplinary Center in Herzliya, Israel and a well respected analyst of Iranian affairs, has serious doubts whether the Iranian public will want any part of the national digital currency.
"There will be some concern whether it will be prone to corruption, because in Iran there is concern about anything that is regime controlled that it could perhaps be manipulated," he told BlockTV.
Javedanfar does believe, though, that Iranians would make the most of the lifting of the ban on mainstream crypto. "According to government figures, Iranians invested last year around $2.5B in cryptocurrencies because of the falling value of the rial," he noted. "If the ban is lifted on foreign crypto, I think people will be more inclined to invest in them. The regime wants to introduce national cryptocurrency as a way of circumventing sanctions and also introducing confidence in the way people interact economically with the government. But even if the crypto is successful, it is in no way a measure near enough to circumvent sanctions."
"The regime wants to introduce national cryptocurrency as a way of circumventing sanctions and also introducing confidence in the way people interact economically with the government. But even if the crypto is successful, it is in no way a measure near enough to circumvent sanctions." Meir Javedanfar, a lecturar on Iran at the Interdisciplinary Center in Herzliya, Israel and a well respected analyst of Iranian affairs.
Meanwhile, Nasser Hakimi, the deputy for innovative technologies at the Central Bank of Iran, spoke at a crypto conference in Tehran on Sunday, and seemingly suggested that the ban on prevalent global cryptocurrencies will be lifted in September.
"The High Council of Anti-Money Laundering has imposed a ban in light of concerns over global allegations of money laundering and financing of terrorism. But it seems that after the government’s consideration, this blanket ban will be reviewed," he claimed.
Many countries have explored the possibility of national cryptocurrencies, but to date only Venezuela has implemented one, which has been far from a success. Venezuelan President Maduro launched the Petro in February 2018 in an attempt to circumvent U.S. sanctions. The Petro is supposedly backed by Venezuela’s reserves of oil, gasoline, gold, and diamonds, but Weiss Cryptocurrency Ratings has called the currency "a worthless token," as its white paper displays no method as to how the Venezuelan government will base the Petro on oil prices.