Iran prepares to announce state-backed cryptocurrency

Marco Green
January 31, 2019

But can Tehran succeed where Venezuela's Petro has failed?

An annual 2 day Electronic Banking and Payment Systems conference is scheduled to take place in the Iranian capital, Tehran on Tuesday. This reverses the Bank's own ruling in April 2018 when it banned any cryptocurrency dealings, including Bitcoin anywhere in Iran. This will ensure that the forthcoming cryptocurrency would lack credibility in global exchanges. It's thought that the Persian Gulf country is feeling the affects of these sanctions given that it is willing to embrace the idea of a national cryptocurrency despite originally approaching the subject from a less than crypto-friendly perspective. If approved, then consumers in the area may be banned from the use of certain cryptocurrencies when making payments, which may impact Bitcoin as well. In its initial phase, this currency would be pegged to the Rial and would be used primarily by the banks and financial institutions in the country to get foreign payments which have been affected since the SWIFT ban came into effect.

Initial plans for the central bank's cryptocurrency were revealed after the United States imposed tight economic sanctions on Iran following the breakdown of the Iran nuclear deal.

Furthermore, in an effort to prevent more value loss of the rial, it bars Iranians from holding large amounts of global cryptocurrencies in the same way they are officially prohibited from holding more than 10,000 euros.

The Islamic Republic of Iran has been under quite some economic stress after being barred from the Belgian global messaging system which facilitates cross-border payments called SWIFT, followed by USA sanctions.

Iran is reportedly on the verge of launching its own cryptocurrency, after months of research and investment into blockchain technology in a move that could bolster its sanctions-hit economy.

This isn't the first time nations are collaborating to create a joint crypto. Immediately after the deal was signed, Yuri Pripachkin, the head of the Russian Association of Crypto Industry and Blockchain, said that Iran was already working on an alternative to SWIFT.

Last year, Iran began plans to develop an indigenous cryptocurrency. He explained that his understanding of cryptocurrencies is that they are decentralized by design.

However, while the Petro has substantially increased in value since it went on sale in October, it has failed to effectively stabilize Venezuela's hyperinflation, which Venezuelan President Nicolas Maduro cited as the primary goal for its introduction, CoinTelegraph reported.

Other reports by Click Lancashire

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