Iran Might Announce its State-Backed Cryptocurrency This Week

On Jan. 27 local English-language news outlet Al Jazeera reported that Iran could announce its state-backed cryptocurrency during the Electronic Banking and Payment Systems conference in Tehran this week.

Since November, Iran has faced new sanctions from the United States, so the country had previously intended to use blockchain-based financial tools as a way of circumventing restrictions on its economic growth.

Tehran thought they could forge an alternative to SWIFT via a central bank-issued digital currency (CBDC), which could be a rial-backed crypto. SWIFT is the global settlements system that some Iranian banks do not have access to.

Sources are still unclear on whether such a large-scale implementation will take place, but more localized uses for the digital currency, like consumer payments, is a likely option.

Yashar Rashedi, a blockchain developer at Iranian firm Radfa, told Al Jazeera that it certainly wouldn’t replace the likes of bitcoin because of their centralized nature, but their existence is harmless.

Rashedi also explained that even if CBDCs never finds widespread daily use among the general public, it may be able to provide some new features to startups and developers that work with centralized bank APIs.

Iran is one of many states who is looking at releasing centralized digital currencies, some of those are also working around U.S. sanctions.

For example, Russia is working on a crypto ruble. However, it is still many years away from launch, according to a government official earlier this month while Venezuela has the Petro, a digital currency that is already circulating but has faced multiple accusations of illegitimacy and sanctions of its own.

As reported by a signatory of the recent Chainpoint blockchain agreement between Iran, Russia, and Armenia, the former is already developing a blockchain-based approach that will replace SWIFT.

Yuri Pripachkin, the head of the Russian Association of Crypto-Industry and Blockchain told Al Jazeera that according to their information, active development of an Iranian version of SWIFT is currently being worked on.

However, in December, U.S. lawmakers cautioned that they could also sanction any form of the crypto-rial.

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