Iran: Model Of State-Issued Digital Currency Now Ready, Says Gov’t Minister

An Iranian government minister has confirmed that an experimental model of a domestic digital currency is now ready, Reuters reported Saturday, April 28. The move closely follows the country’s recent banking blockade on cryptocurrency trading.

Information and Communications Technology (ICT) Minister Mohammad Javad Azari-Jahromi was quoted by state news agency IRNA as saying;

“The central bank’s [ban] does not mean the prohibition or restriction of the use of the digital currency in domestic development […] Last week, at a joint meeting to review the progress of the [domestic cryptocurrency] project, it was announced that the experimental model was ready.”

Minister Azari-Jahromi first tweeted of the Post Bank’s plans to develop a “cloud-based digital currency” for Iran’s banking system on February 21:

در جلسه‌ای که با هیئت مدیره پست بانک در خصوص ارزهای دیجیتال مبتنی بر زنجیره بلوکی داشتم، مقرر شد این بانک اقدامات لازم برای پیاده سازی آزمایشی اولین ارز دیجیتالی کشور را با استفاده از ظرفیت نخبگان کشور به عمل آورد. مدل آزمایشی برای بررسی و تایید به نظام بانکی کشور ارائه خواهد شد.

— MJ Azari Jahromi (@azarijahromi) February 21, 2018

"A meeting on Blockchain-based digital currencies with the board of directors of the Post Bank set out the necessary measures for an experimental implementation of the country's first digital currency [...] A pilot model for review and approval will be presented to the banking system of the country."

Azari-Jahromi has not clarified whether the locally developed digital currency will eventually be made available to the public, nor whether it will be issued by Post Bank (51 percent of which is owned by the government), or by another government or financial entity.

Iran’s central bank banned domestic banks and other financial entities from dealing in cryptocurrencies in early April, citing money-laundering concerns.

April has also seen coordinated measures across Iranian financial institutions to halt a national currency crisis, with the Iranian rial plummeting to unprecedented lows amid fears of a possible renewal of sanctions if the U.S. chooses to exit a multilateral nuclear accord on May 12.

Iran’s pursuit of a state-backed digital currency has caused some to draw the comparison with Venezuela’s centrally-issued Petro, which many have viewed as an attempt to bypass the country’s own crippling international sanctions.