The Future Is Here: Iran's Central Bank Goes Digital With Its Currency

The Monetary and Banking Research Institute of Iran has completed preliminary research for the launch of a potential digital rial, as part of its central bank digital currency (CBDC) plans, according to an official statement from the Central Bank of Iran's (CBI) research arm.

What Happened: The CBI aims to increase the scope of the CBDC pilot in the country's payment system, but is not rushing the implementation.

Mohammad Reza Mani Yekta, head of the CBI office for supervising payment systems, noted a digital rial would be distributed among individuals and banks with the CBDC infrastructure recreating some blockchain features.

The "crypto rial," pegged to the national currency at a 1:1 ratio, reportedly runs on a platform called Borna, which was developed using Hyperledger Fabric.

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Ten banks in Iran, including Bank Melli, Bank Mellat and Bank Tejarat, have applied to join the digital rial project.

All banks and credit institutions in Iran are reportedly expected to start offering electronic wallets for the upcoming digital currency.

Why It Matters: The CBI started planning to launch a CBDC pilot in January 2022 and reportedly started rolling out the pilot in September 2022, aiming to improve financial inclusion and compete with global stablecoins.

The Iranian authorities are also reportedly preparing to hold an official meeting with the Bank of Russia's governor Elvira Nabiullina, who is expected to visit Iran in the near future, as Russia and Iran have reportedly been working together to create a gold-backed stablecoin that would serve as a payment method in foreign trade.

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