A domestic gold-backed digital currency created on blockchain platform was unveiled by Kuknos Company in a ceremony attended by CEOs of banks and judiciary officials.
According to IBENA, the cryptocurrency is the outcome of collaboration between Kuknos Company and four banks, namely, Bank Mellat, Bank Melli Iran, Bank Pasargad, and Parsian Bank, which host the services. The over-the-counter exchange Iran Fara Bourse is also set to join in hosting the new currency.
Valiollah Fatemi, director of Kuknos said the currency dubbed PayMon(covenant in Persian), will be used to issue the initial token based on gold and the company seeks to tokenize assets and excess properties of banks.
“People will soon be provided with a facility to trade units of banks’ surplus assets backed by gold, using applications installed on their smart phone,” he told state TV.
“The token can function like a wallet and channel the [banks] excess assets into the economic cycle. We seek to extend the technology for accelerating the pace of bank transactions,” he said.
“Economists believe that liquidating excess bank properties gives rise to inflation and insist this approach can lead to higher value-added if the money is spent on boosting the production sector,” he said.
He pointed to the threats that many claim the blockchain technology could pose to banks, saying that “It is on us to change threats into opportunity for our national sovereignty and economic prosperity.”
Open and Transparent
According to Mohammad Samadi, another official with Kuknos , the network operates in a transparent manner where details about the transactions can be traced easily, saying that the company is set to offer 1 billon units of Peyman crypto currency hosted by the four banks and the TOSAN Group—a banking software development company.
The currency is planned to be offered on Iran Fara Bourse (an over the counter market for securities) in the near future.
Unveiling of the cryptocurrency came soon after the Central Bank of Iran released a draft of its cryptocurrency policy late Monday, calling on experts and stakeholders in the area of virtual currencies to send their views on the policy.
The CBI notes that the spread of cryptocurrencies will have potential ramifications for monetary and foreign exchange polices and by creating new venues could [also] present threats to the general public and organizations that use them," the CBI announcement said.
From the CBI view, tokens could be backed either by gold or other precious metals, the national currency, foreign currencies and other visible or invisible assets.
Hamid Shahriari, judiciary deputy for Statistics and Information Technology said at Wednesday's event that "blockchain tsunami" is a threat to the country's institutions like banks and the National Organization for Civil Registration and timely measures should be taken to deal with that." He added that opportunities of blockchain technology should also be taken into close consideration.
The CBI says it is the only entity that can issue a national cryptocurrency – plans for which are already underway.
According to draft rules, the planned national cryptocurrency can be traded only via certified banks inside the country and be used as a payment tool. The national cryptocurrency cannot be mined.
