Iran Advances in CBDC Development with Completion of Pre-Pilot Phase

Iran has finished conducting initial research for the launch of a possible digital version of their currency, the rial, as part of their plans for a central bank digital currency (CBDC).

The Monetary and Banking Research Institute, which is the research division of Iran's central bank, announced the completion of the pre-pilot phase for the development of the CBDC.

Head of the CBI's payment systems supervision office, Mohammad Reza Mani Yekta, revealed the news at a conference on electronic banking and payment systems, stating that the CBDC pilot will be expanded in Iran's payment system, but its implementation will not be rushed.

Mani Yekta also mentioned that the pre-pilot phase ended successfully with significant accomplishments, and the project will soon be launched in other ecosystems and accessed by more users.

According to Cointelegraph, Mani Yekta stated that if a digital version of the rial is launched, the regulations that apply to physical banknotes would also apply to the digital currency. Furthermore, the CBDC infrastructure would incorporate some blockchain features, and both individuals and banks would receive the digital rial.

During the experimental phase of the project, ten Iranian banks, including Bank Melli, Bank Mellat, and Bank Tejarat, have applied to join the initiative.

All banks and credit institutions in Iran are expected to offer electronic wallets to enable the use of the upcoming digital currency.

The CBI has been planning to launch a CBDC pilot since 2017, with the official pilot starting in September 2022, with the aim of enhancing financial inclusion and competing with global stablecoins.

It is worth noting that Iran has launched a digital currency initiative known as the "Crypto Rial," which is pegged to the national currency, the Iranian rial, at a 1:1 ratio.

The digital currency is said to be supported by Borna, a platform that was created using IBM's Hyperledger Fabric, an open-source enterprise blockchain system.

This announcement comes at a time when Iranian authorities are preparing for an official meeting with Elvira Nabiullina, the governor of the Bank of Russia, who is anticipated to visit Iran soon.

Russia and Iran are reportedly collaborating to establish a gold-backed stablecoin that would function as a means of payment in international trade.