The
Central
Bank
of
Iran
(CBI)
will
begin
a
trial
of
its
central
bank
digital
currency
(CBDC),
the
digital
rial,
in
Kish
Island
starting
in
July.

The
central
bank
said
on

June
19
that
banking
network
customers
and
tourists
can
use
the
digital
rial
wallet
to
make
purchases
and
transfers
between
wallets
via
barcode
without
paper
money
or
bank
cards.

 

No
intermediary

The
central
bank
emphasized
that
CBDC
is
not
used
through
bank
accounts
and
does
not
require
interbank
settlement.
Upon
receiving
it,
recipients
can
transact
directly
via
the
CBDC
without
an
intermediary.

Two
private
banks,
Mellat
Bank
and
Tejarat
Bank,
will
participate
alongside
banking
and
payment
networks
during
the
trial
phase.

The
test’s
location,
Kish
Island,
has
140,000
residents
and
12
million
annual
visitors
and
is
a
free
trade
zone,
providing
opportunities
to
trial
the
asset.

CBI
also
described
the
digital
rial’s
programmability,
calling
the
feature
the
“driving
force”
behind
new
business
models
such
as
e-commerce
and
the
digital
economy.

The
central
bank
said
that
the
CBDC
is
intended
to
improve
payment
infrastructure
resilience
and
stability,
improve
efficiency
and
create
new
payment
tools,
reproduce
the
role
of
electronic
banknotes
for
small
payments,
and
manage
risks
caused
by
the
spread
of
private
money.

 

The
bank
added
that
the
digital
currency
will
offer
ease
of
use
while
increasing
payment
security.

Iran
and
digital
currencies

Iran’s
CBDC
has
been
in
progress
since
at
least
2021.
The
country

reportedly
began
to
test
the
currency
at
banks
and
shops
in
2022
and
started
a
limited
trial
in
2023.

Iran
could
also
use
central
bank
digital
currencies
outside
of
its
borders.
In
May,
Izvestia

reported
that
Iran
and
Russia
could
use
CDBCs
to
bypass
sanctions,
based
on
statements
from
trade
attaché
of
the
Iranian
Embassy
in
Russia
Rahimi
Mohsen.

Despite
its
advanced
development
of
a
CBDC,
the
country
remains
somewhat
anti-crypto.
Local
financial
institutions
are
barred
from
handling
crypto,
but
the
peer-to-peer
market
continues
to
thrive,
as
is
the
case
with
many
emerging
and
developing
economies.

Additionally,
Iran
allows
import
companies
to
transact
via
crypto
for
business
purposes
—
mainly
to
bypass
US
sanctions.

Go to Source
Author: Mike Dalton

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