Iran Begins Piloting Its CBDC “Crypto-Rial”

Iran Begins Piloting Its CBDC “Crypto-Rial”

The Central Bank of Iran (CBI) will start piloting the use of the “crypto-rial” — its central bank digital currency this week, according to an announcemeent on the Iran Chamber of Commerce’s website.

The announcement further states that one of the crypto-rial’s main features is its high security as it has been designed in a way that allows it to be tracked even if a user’s phone has been hacked.

According to earlier CBI statements and a draft whitepaper, the crypto-rial is planned as a new type of the national currency, like banknotes and coins, though it would be completely digital.

However, a separate article on the Chamber of Commerce’s website noted concerns raised by Iranian economists and experts.

On a micro level, analysts say that businesses are not prepared to accept the currency from customers and that users’ familiarity with digital wallets remain questionable.

At the macro level, experts are unsure about the potential negative impact that the crypto-rial could have on existing Iranian financial institutions such as banks.

“Banking is a business of financial intermediation and implementing large projects would weaken banks’ role in financial intermediation. It seems that the CBI has not clarified the project to experts simply because no banker so far has made any statement to this effect,”

said Ahmad Azizi, a former Deputy Governor of the CBI.

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