CBI to Launch Digital Rial Pilot

EghtesadOnline: The Money and Credit Council has approved a proposal by the Central Bank of Iran for minting a digital rial as a central bank digital currency (CBDC), CBI deputy governor for innovation technologies said.

News ID: ۷۸۷۶۶۰

19 January 2022

"Hopefully we will soon launch the pilot phase of the plan. We are looking at several potential impacts of the new technology on the state, citizens and economic indices," Mehran Moharramian was quoted as saying by the CBI website.

Earlier the CBI said it was developing a national cryptocurrency to promote financial and payment services in the domestic banking industry via the inter-bank and the micro-banking level.

Informatics Services Corporation (ISC) has developed the CBDC platform and the CBI has prepared the infrastructure.

The ISC, a subsidiary of the CBI, specializes in banking solutions, has said a pilot model of the digital rial is ready. However, considering the substantial growth in payments during the last two months of the year, it has decided to start the pilot after the Nowruz holidays in March.

Banks will get involved in the digital rial process in the second phase, by developing wallets and payment apps to be able to offer services at the opportune time.

Interest in CBDC has been growing globally in response to advances in payments, finance and technology, as well as the disruption caused by Covid-19.

A 2021 survey by the Bank of International Settlements found that 86% of the world’s central banks are actively researching the use of CBDCs, 60% experimenting with the technology and 14% have launched pilot projects.

So far about 55 countries are working on the proof of concept of CBDCs and nine have fully launched digital currencies. Nigeria is the latest with its e-naira.

According to the Atlantic Council, 14 countries, including China and South Korea, are now in the pilot stage with their CBDCs and preparing a full launch.

The ISC has stressed that that crypto-rial will not to be used for bypassing the US sanctions.

"The digital rial will help ease cashless payments and diversify payment tools and innovative services," Davoud Yaqoubi, head of the ISC blockchain department, said earlier.

"It is not designed to compete with global cryptocurrencies. Unlike bitcoin and other cryptos, CBDCs are centralized…It is not anonymous and will be fully in accord with the anti-money laundering requirements," Yaqoubi added.

It considerably reduces money circulation costs, he stressed.  "It will help improve financial inclusion and act as a powerful tool for the CBI to compete with other stable coins used globally."