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Iran plans digital rial launch to modernise financial systems

Iran plans digital rial launch to modernise financial systems

GrafaGrafa2024/11/27 06:40
By:Isaac Francis

The Central Bank of Iran (CBI) has announced the upcoming launch of its central bank digital currency (CBDC), the digital rial, aimed at modernising the nation’s financial systems and mitigating the effects of international sanctions.

The announcement was made by CBI Governor Mohammad Reza Farzin at the Modern Banking and Payment Systems Conference on November 25.

“Developing innovative banking systems is a central bank’s responsibility worldwide, and we are determined to fulfill this duty in Iran,” Farzin stated, emphasising the importance of innovation in banking.

The digital rial, in development since 2018, uses open-source Hyperledger Fabric technology and completed its "pre-pilot" stage by mid-2023 with the participation of leading Iranian banks.

A pilot project for the CBDC was launched in June on Kish Island, a free trade zone known for its annual influx of 12 million tourists.

The digital rial is designed for retail use and is currently focused on domestic applications.

Farzin addressed the challenges posed by international sanctions, noting progress in circumventing these barriers.

He highlighted the integration of the Iranian ACU and Russian MIR payment systems, replacing SWIFT for cross-border transactions.

“We’ve replaced SWIFT with this platform and strengthened our ties with BRICS, which is shaping global trade with a strategic plan through 2025,” Farzin stated.

Iran’s Shetab payment system, which processes transactions in under two seconds, is also being linked with Russia’s MIR system to further enhance financial connectivity.

Other collaborative efforts include developing a gold-backed stablecoin and experimenting with cryptocurrency for international trade, despite restrictions imposed by sanctions.

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