The Central Bank of Iran says the pre-pilot phase of its Central Bank Digital Currency project, CryptoRial, is complete and now in its pilot phase.
"The pre-pilot phase ended successfully with valuable achievements. The project will soon be launched in other ecosystems and will be used by more users," Mohammad Reza Mani Yekta, head of CBI office for supervising payment systems was quoted as saying by Ebinew website.
"Ten banks have applied to join the project. This gives us further inspiration about the project’s future," Mani Yekta said.
Bank Melli, Bank Mellat and Bank Tejarat were involved in the experimental phase of the project. All banks and credit institutions are expected to start offering electronic wallets for using the new national currency.
Melli and Mellat have already started selling limited amounts of crypto-rial and also accept the e-currency. The Money Reserve Supervisory Board had approved 10 billion rials of CryptoRial be minted for use in the pre-pilot phase.
The CBI has said that it has in place infrastructure for the cryptocurrency planned as a new type of national currency, like banknotes and coins, but fully digital.
Based on what is known about the CBI crypto agenda, the e- 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 expand financial inclusion and function as a robust 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 implementing smart contracts.
Distributed ledger technology (DLT) is a digital system for recording the transaction 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.
The CBI earlier provided some details about the project in a draft of the CryptoRial whitepaper. Even though the document contains valid information it does not fully address concerns raised by economists and experts.
The CDBC is set to be used for micropayments inside the country, but analysts say businesses are not yet prepared to accept it. Moreover, users' familiarity with digital wallets and its security must be promoted before the plan is implemented.
Recently Iran Kish Credit Card Company, an authorized payment service provider, and Tejarat Bank unveiled an e-wallet for using CryptoRial -- the first of its kind.
Zomorod is basically an electronic wallet allowing users to make CryptoRial payments using QR codes. Users are authenticated using their ID numbers.
Morteza Tork Tabrizi, Tejarat Bank vice chairman, said, "CBDC, like any other advanced technology, requires involvement of businesses active in diverse sectors…The business plan of companies wanting to offer services related to CryptoRial is important and we must ensure that users welcome the new form of currency."
Hossein Yaghoubi, head of the blockchain department at Iran Informatics Services Corporation, said that the company made use of talented youth who worked on the project for two years to create the most suitable output for the Iranian context.
"One key challenge of the project was its impact on other sectors as well as lack of a known standard for developing CBDCs across the world."
Market analysists, developers and e-commerce experts met recently to assess the CBI document on the CryptoRial. A glance of their stances and statements confirms some experts' position about the ambiguities surrounding the project.
Mehran Moharramian, the deputy for innovative technologies at the central bank, said earlier that the CBI's primary aim in developing the CryptoRial is to create a new programmable form of currency, known as open money. "In short, money will be equipped with smart features and be multipurpose. A key feature will be close monitoring of how bank loans are used, which is almost impossible with the existing national currency, the rial."
Abbas Ashtiani, head of the Iran Blockchain Association, has expressed reservations about the central bank’s approach to blockchain technology.
"The technology is capable of providing a wide range of features. However, we need to see how the CBI intends to use the new technology, which features or aspects would be used and which will be blocked," the Persian-language journal Peivast quoted him as saying.
