Iran Crypto-Rial Test Begins

• •  Central Bank of Iran said it will begin a test launch of its central bank digital currency, crypto-Rial.
  • The Crypto-Rial’s goal is to turn banknotes into a programmable format.

Iran’s Chamber of Commerce has stated that the Central Bank of Iran (CBI) plans to conduct an experimental trial for its central bank digital currency (CBDC) – crypto rial.

Crypto-Rial; Crypto-Rial is designed to leverage blockchain technology so as to transform Iranian Rial banknotes into a programmable format that can be more easily transacted across borders and around the world.

Governor Ali Salehabadi, of the Central Bank of Iran, stated that;

The bank has in place the infrastructure and rules for the crypto-Rial. The cryptocurrency is planned as a new type of national currency, like banknotes and coins, but fully digital.

The Crypto-rial’s goal is to turn banknotes into programmable entities. Other than its increasing usability, one of the main features of the Crypto-Rial, recognized by the CBI, is its high level of security.

Iran’s Chamber of Commerce said.

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 Central Bank of Iran predicts that the crypto-rial will help improve financial inclusion in the country and serve as a tool to help the country’s economy compete with other dominant currencies globally. This happening in Iran, is the latest to show the country’s increasing interest in cryptocurrencies and blockchain technology.

Earlier this year, Iran’s government approved the settling of cross-border payments using cryptocurrency through the Central Bank of Iran crypto platform. On 9th August, the first settlement by cryptocurrency was done in the country, where imported goods worth $10 million were settled by cryptocurrency.

White House is Exploring Central Bank Digital Currency.

Not only Iran, other powerful nations like the US and China are exploring CBDC. Democrats have been pushing for the U.S. Federal Reserve to move forward on a digital dollar. Biden’s administration has been looking into the possibilities of issuing a central bank digital currency (CBDC) based on a report by the White House Office of Science and Technology Policy.

Some of the many benefits the US government would get if they embraced a CBDC as stated by Alondra Nelson, head of the White House Office of Science and Technology Policy, in a press briefing would include;

Facilitating efficient and low-cost transactions, fostering greater access to the financial system, boosting economic growth, and supporting the continued centrality of the U.S. within the international financial system.

However, a U.S. CBDC could also introduce a variety of risks, as it might affect everything ranging from the stability of the financial system to the protection of sensitive data.

The central bank digital currency system should blend smoothly with the traditional forms of the US dollar and improve existing payment systems, ensure global financial interoperability, protect national security and align with democratic and environmental values, the report adds.

It should also be able to absorb technical provisions that prevent the use of the digital dollar in ways that violate civil or human rights. However, the report does not specify if the CBDC should bring in a third party to facilitate payments between a sender and a receiver. But, there are some privacy concerns

Earlier in March, three Republican senators proposed a bill to prohibit the Federal Reserve from issuing CBDC directly to individuals, warning that it could end up being used as a “financial surveillance tool”.

Senator Ted Cruz stated;

This bill goes a long way in making sure big government doesn’t attempt to centralize and control cryptocurrency so that it can continue to thrive and prosper in the United States.