The Central Bank of Iran plans to launch its digital currency project, known as the crypto-rial by the end of the summer.
Governor Ali Salehabadi made the announcement at the opening ceremony of the 29th Annual Monetary and Banking Conference in Tehran.
He also announced plans for issuing forex bonds in the coming days. "Forex bonds are innovative tool…The principal and interest will be paid in foreign currency," the CBI website quoted him as saying.
The aim is to attract holders of foreign currencies, usually in cash kept in their homes, he said.
"Listed companies with forex earnings will also be allowed to issue forex bonds.”
Salehabadi did not provide details about the CBDC project, however, according to earlier statements, the crypto-rial is planned as a new type of the national currency, like banknotes and coins, though it would be completely digital.
Based on what is known so far about the CBI crypto initiative, the digital currency is not designed to compete with global cryptocurrencies. Unlike bitcoin and other cryptos, CBDCs are centralized, not anonymous and in accord with anti-money laundering requirements.
The move seeks to help improve financial inclusion and act as a powerful tool for the CBI to compete with other stable coins used globally.
The digital currency is to be minted in a distributed ledger system, consisting of authorized financial institutions and capable of implementing smart contracts.
Distributed ledger technology (DLT) is a digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality.
In 2018, the Informatics Services Corporation (ISC), the executive arm of the CBI in charge of the local banking automation and payment services network, was tasked with developing the national cryptocurrency.
In January the CBI said it would launch its CBDC project in the near future. Interest in CBDC has been growing globally in response to changes in payments, finance and technology, as well as the massive global disruptions caused by Covid-19.
So far about 55 countries are working on the proof of concept of CBDCs and nine have fully launched digital currencies. Nigeria is the latest with its e-naira.
