Key takeaways:
- In an open pilot program, the Central Bank of Iran (CBI) will introduce a national digital currency for use in domestic micropayments.
- Bank clients and visitors will be able to use the digital rial as part of the pilot program to pay for products and services by using special software to scan a barcode.
In an open pilot program, the Central Bank of Iran (CBI) will introduce a national digital currency for use in domestic micropayments.
The CBI formally declared on June 18 the beginning of a pilot program for the digital rial, Iran’s central bank digital currency (CBDC). Bank customers and visitors to the island of Kish will have access to Iranian digital money as part of the pilot program. The pilot will begin on June 21, the first day of the calendar month of Tir.
Kish, an island south of Iran, is the second largest in the Persian Gulf, with an area of 92 square kilometers. Kish is a well-liked vacation spot that supposedly welcomes 12 million tourists annually.
Travellers from a wide range of nations do not need to obtain a visa in order to visit Kish because it is the operator of one of Iran’s free trade zones.
Iran’s former minister of information and communications, Muhammad Javad Azari, suggested in 2021 that Kish be turned into a center for both local and foreign crypto exchanges.
The general introduction of the digital rial on Kish Island, as announced by Iran’s central bank, will be a growth of the digital rial pilot program, which commenced in 2023.
Bank clients and visitors will be able to use the digital rial as part of the pilot program to pay for products and services by using special software to scan a barcode. In addition to cash and bank cards, the digital rial offers a new payment option. The CBI stated in the statement:
“Unlike other types of electronic money commonly used in the country, which are used through bank accounts and common payment tools such as bank cards, the digital rial does not require interbank settlement to transfer funds between the buyer and the seller,”
According to an article by Iran’s central bank, one of the main goals of the digital rial is to set the stage for the growth of the nation’s digital economy and address the needs of the payment industry.
The CBI stressed that the digital rial has only been utilized thus far to enable domestic micropayments and to be used within the nation’s borders.
The Iranian government has adopted a conflicting position regarding crypto, such as Bitcoin. Although crypto sales and purchases are permitted, the government forbids the use of crypto to pay for products and services.
Since 2018, Iran has also regulated the domestic crypto-mining industry. Senators from the US, like Elizabeth Warren, claim that Iran’s bitcoin miners are a threat to US national security because they could enable Iran to evade US sanctions.
Recently, the National Bank of Ethiopia (NBE) has prepared two proclamations as part of its economic reform agenda. The Council of Ministers has approved the proclamations, which will soon be delivered to the House of Representatives.
