Iran runs pilot launch of Crypto-rial today to improve security September 22, 2022
Iran runs pilot launch of Crypto-rial today to improve security<br><br><br>
Iran runs pilot launch of Crypto-rial today to improve security
To turn banknotes into a programmable entity, the Central Bank of Iran (CBI) has launched a central bank digital currency (CBDC) pilot today on 22 Sept. The initiative had remained in the planning stage for several years until the announcement of the pilot launch was made by the newsroom of the Iran Chamber of Commerce, Industries, Mines and Agriculture on Wednesday, 21 Sept 22.
The aim of designing the crypto-rail is to bring security and transparency. “The main feature of the digital currency is said to be its high security”, said the CBI. They further reported that “Crypto-rial has been designed in a way that it is easy to track and even if the data on the smartphones are hacked, the crypto-rial can be tracked.”
The crypto-rial is planned as a new type of national currency, like banknotes and coins, though it would be completely digital, as stated earlier by the CBI.
The CBI’s crypto is a digital currency that is known so far, however, it is not designed to compete with other global cryptocurrencies. “Unlike bitcoin and other cryptos, central bank digital currencies (CBDCs) are centralized, not anonymous and in accord with anti-money laundering requirements,” stated in the Chamber’s press release.
Moreover, CBDC’s objective is “to help improve financial inclusion and function as a powerful tool for the CBI to compete with other stablecoins globally,” mentions the press release. It also explained that the experts within the country had concerns about businesses’ preparedness to use a CBDC, the public’s understanding of digital wallets and the effect of its introduction would have on banks.
It is also believed that the initiative of crypto-rial will be seen as a means of counteracting the pervasive corruption in Iran.
The CBDC will operate on the Borna Platform, developed using the Hyperledger Fabric — an IBM open-source distributed ledger technology platform, as per Al Jazeera reports. It further says, “Banks will trade paper rials for an electronic one. Since the platform is permissioned, the central bank will select banks to participate.”
The planning and development of crypto rail began in 2018. However, to help modernize the outdated Iranian banking system, Borna was adopted in 2019. This platform will allow the provision of fee-based financial services, although that will not be part of the current trial, according to an Al Jazeera source.
The step taken by the Iranian Government has shown the country’s interest in accepting blockchain technology and cryptocurrencies. During the first quarter of 2022, country’s government approved cross-border payments using cryptocurrency through the Central Bank’s crypto platform. On Aug. 9, the first foreign trade deal worth $10 million of import goods was settled using cryptocurrency only.