The Central Bank of Iran (CBI) has increased their efforts to release a state-backed digital currency in the wake of a ban from Global financial messaging service, SWIFT.
The latest ban from the SWIFT network is a follow up on the US-based sanctions enforced by President Trump and will make it impossible for Iran to settle any of their international bills. However, an alternative for Iran is to introduce a cryptocurrency which is backed by the native fiat currency, Rial. With such a coin existing on a blockchain, the nation can still carry out cross-border transactions with relative ease.
A local news source, Ibena reported that Iran has already finished developing the Rial-crypto and will await approval from the Central Bank before rolling out the virtual currency to commercial banks.
How Iran’s Crypto-Rial Will Function
Seyyed Abotaleb Najafi, CEO of Informatics Services Corporation (ISC), a division of the Central Bank Of Iran confirmed the development of the Crypto-rial to the publication and shed more light on how the cryptocurrency will function.
First, the ISC official was quick to point out that the new Rial-crypto was not only introduced in other to avoid the sanctions imposed by the U. S. Instead, he said that the project would be a “feasibility and evaluation of blockchain and cryptocurrencies” and how they could be integrated into the Iranian financial system.
Next, he explained that the cryptocurrency would be backed 1:1 by the fiat currency while commercial banks will begin using it as soon as the first phase of the project is approved by the Central Bank. The premier bank will be the issuers of the crypto-Rial while commercial banks will use it a payment instrument in transactions and banking settlement.
No specific timeline was provided regarding when the cryptocurrency will go into the mainstream, but one can expect it to happen in the coming days because of the SWIFT cut-off.