The Central Bank of Iran on Monday revealed a draft of its central bank digital currency (CBDC) project whitepaper, known as the crypto-rial and called for recommendations before moving forward.
According to a press release seen on the CBI website, the project is in pre-test phase and the pilot test would be launched after its early performance is scrutinized.
At this phase, Bank Melli Iran and Bank Mellat have started selling limited amounts of crypto-rial to some people. Two shops are also accepting the crypto-rial.
The Money Reserve Supervisory Board has approved 10 billion rials of Crypto-Rial be minted for use in the pre-pilot phase. This is expected to increase by the time the pilot phase is ready for launch.
The CBI has said that it has in place infrastructure for the crypto-rial that is planned as a new type of national currency, like banknotes and coins, but fully digital.
According to the CBI, a third bank is also expected to join the pre-test phase. All the agent banks are set to join during the pilot phase where higher amounts of the CBDC will be sold to the public and more shops will accept the new currency.
Based on what is known so far, 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 plan calls for improving financial inclusion and function as a powerful tool for the CBI to compete with other stable coins globally.
The digital currency is to be minted in a distributed ledger system, consisting of authorized financial institutions and capable of handling innovative contracts.
Distributed ledger technology (DLT) is a digital system for recording the transactions of assets in which details are recorded in multiple places at the same time.
Unlike traditional databases, distributed ledgers have no central data store or administration functionality.
