Iran to adopt a new “digital rial”

• Iran will soon have a national digital currency.
• They will start a test “digital rial” initiative soon.
• The “crypto rial,” will continue to be pegged at a 1:1 ratio to the rial.

Iran will soon have a national digital currency, with the central bank preparing to start a test “digital rial” initiative soon.

It is anticipated that the central bank digital currency (CBDC), popularly known as the “crypto rial,” will continue to be pegged at a 1:1 ratio to the rial, the country’s official currency.

Officials believe this scheme will provide them more power over the country’s currency and its users while giving financial actors additional options.

While cryptocurrencies were at their all-time highs in 2018, some officials in Tehran saw the potential of cryptocurrencies to circumvent sanctions after former President Donald Trump unilaterally withdrew from a 2015 nuclear agreement with Iran.

However, that will not be the case with the digital rial, as it will only be used within Iran’s border. Iran was hit with harsh US sanctions as a result.

Members of the local crypto community are worried about the initiative since some of the exact same potential alternatives that have supporters thrilled could jeopardise privacy and security.

The open-source commercial blockchain platform Hyperledger Fabric, created by US technology behemoth IBM, was used to create Borna, the basis on which the digital rial will function.

The currency cannot be mined like Bitcoin and many other decentralized cryptocurrencies because it runs on a distributed ledger technology (DLT) platform that has been approved by the central bank.

The network’s distributed ledger, which contains an immutable record of all transactions and activities, may be updated and maintained by a small number of chosen institutions thanks to the structure. In the future, access might also be given to other entities.

Bank customers should be able to exchange the equivalent amount of the new digital rials that will be kept in their mobile phone wallets for their current rials, which are currently held in banknotes or accounts, at the banks.
greater clarity

Saeed Khoshbakht, one of the individuals involved in the development of Borna, claims that the initiative is unique in Iran and will contribute 1% to future developments.

He added that even while the project was heavily centralized, it would nevertheless enable participation from additional institutions in the aforementioned distributed ledger, potentially enhancing transparency.

Also Read

Police in Iran beat a woman to death

A 22-year-old Iranian woman died on Friday. She had been arrested by...