Iran to Launch State-Backed Cryptocurrency to Counter SWIFT and US Regulations

According to a news report published by local Iranian English Publisher Al Jazeera, Iran is planning to launch a state-backed cryptocurrency at its Electronic Banking and Payment Systems conference in Tehran.

Iran has been on the receiving end of US sanctions since November last year, and it had earlier planned to make use of blockchain-based tools to counter such hindrances in its economic growth.

If the sources are to be believed, the central bank issued digital currency(CBDC) could be Rial-backed, and help the country counter the universal SWIFT payment system, which is inaccessible in many banks currently. The sources could not confirm whether the new blockchain tool would see a widespread implementation, but assured that small term uses like a daily payment system is definitely on the cards.

One of the Iranian Blockchain developer Rashedi said,

“Even as [CBDCs] may never find widespread everyday use among the general public, they may be able to offer some new features to startups and developers that had to work with centralized bank APIs before them.”

State-Backed Cryptocurrencies Becoming a Norm?

Iran’s plans of launching its own state-backed cryptos have been in the pipeline ever since the US sanctions were looming over its head. However, Iran is not the first country to opt the crypto way to counter traditional services and US sanctions.

Russia’s crypto rubel project is still years away from commencing, Venezuela’s crypto project Petro is circulating but it has created more problems for the government rather than solving the economic crisis, for which the project was initiated. The Petro has also received US sanctions for its dubious nature.

US has already warned Iran over its trials of state-backed crypto and has affirmatively said that crypto-rial would receive likewise sanctions from the US.

Final Thoughts

The US lawmakers and politicians have used the sanctions against middle eastern countries as a political tool for long. However, what these nations need to focus and learn from Venezuela’s disastrous crypto debut is to take time and invest in the underpinning technology.

Venezuelan government gave hope to its citizens when it announced the oil-backed Petro crypto, however in a hurry to launch the currency, it skipped many parts in the development process, making the Petro even more unreliable then the national fiat currency.

Even if crypto-rial face US sanctions, what the Iranian government needs to do is, make the technology strong enough to be supported at the local level, where it can be used as a daily mode of payment by the citizens.