Iran to Launch CBDC Pilot Project
19 Jun, 2024 ● أخبار العملات المشفرة
The Central Bank of Iran (CBI) is initiating a public pilot program for a national digital currency aimed at domestic micropayments.
On June 18, the CBI officially announced the pilot launch of Iran’s central bank digital currency (CBDC), known as the digital rial.
This pilot will be available to banking customers and tourists on Kish Island, starting on June 21, the first day of the calendar month of Tir.
Kish, a 92-square-kilometer island in the Persian Gulf south of Iran, is the second-largest island in the region and a popular tourist destination, attracting about 12 million visitors annually.
Operating as one of Iran’s free trade zones, tourists from many countries do not need a visa to visit Kish.
In 2021, Muhammad Javad Azari, a former Iranian minister of information and communications, suggested transforming Kish into a hub for domestic and international cryptocurrency exchanges.
The public rollout of the digital rial on Kish Island is part of an expansion of the digital rial pilot program that began in 2023, according to Iran’s central bank.
During the pilot, bank customers and tourists can use the digital rial to pay for goods and services by scanning a barcode through specialized software.
This digital currency offers an additional payment method alongside cash and bank cards.
The CBI noted, “Unlike other types of electronic money commonly used in the country, which are used through bank accounts and common payment tools such as bank cards, the digital rial does not require interbank settlement to transfer funds between the buyer and the seller,” adding that funds are transferred immediately upon completion of the transaction.
The CBI further stated, “Payment with this method is much easier than common card payment methods while increasing payment security.”
One primary goal of the digital rial is to lay the foundation for developing the digital economy in Iran and address the payment sector's developmental needs, according to Iran’s central bank.
The CBI also highlighted the digital rial's role in enhancing micropayments, stating:
“Other important goals such as increasing resilience and stability in the country's payment infrastructure, recreating the role of electronic banknotes in small payments in the country, improving the efficiency and developing new payment tools, and managing the risks caused by the spread of private money are also considered [...]”
The CBI stressed that the digital rial has so far been used solely for facilitating domestic micropayments within the country’s geographical boundaries.
The Iranian government has taken a mixed approach to cryptocurrencies like Bitcoin.
While it permits crypto purchases and sales, it has banned the use of crypto for paying for goods and services.
Since 2018, Iran has also been regulating its local cryptocurrency mining market. U.S. Senators, including Elizabeth Warren, have expressed concerns that Iran’s cryptocurrency miners could pose a national security threat to the U.S. by potentially enabling Iran to circumvent U.S. sanctions.
Sources:
https://cointelegraph.com/news/iran-public-cbdc-pilot-digital-rial-june-2024
https://www.cbi.ir/showitem/29982.aspx
