On Monday, the Central Bank of Iran (CBI) announced that it notified domestic banks and credit institutions about a series of regulations related to Iran’s ‘crypto-rial’, its forthcoming central bank digital currency (CBDC).
According to way2pay.ir, the rules describe how the digital currency is minted and distributed. Crypto-rials will be minted, and their maximum supply will be decided solely by the CBI.
Also, according to the website, a distributed ledger system, which comprises authorized financial institutions and can implement smart contracts, is supposed to be used to issue the digital currency.
In earlier statements, the crypto-rial was to become the nation’s new currency, just like banknotes and coins, but it would be completely digital.
From what is known about the CBI’s crypto initiative, the digital currency is not designed to compete with global cryptocurrencies . It is the central bank’s responsibility to authorize the members of the system and to assess the impact of the new currency on the economy on a regular basis. There is no mention of wallets or transaction fees in the rulebook.
The move seeks to improve financial inclusion and give the CBI a competitive advantage against other global stable coins. As part of the local banking automation and payment services network, the Informatics Services Corporation (ISC) was tasked in 2018 with developing a national cryptocurrency. The CBI first announced its CBDC project in January.
CBDC in Jamaica
Early this year, the Bank of Jamaica (BOJ) announced the successful completion of its CBDC pilot. In March 2021, the BOJ announced the testing of a prototype CBDC in its financial regulatory sandbox .
While other central banks around the world are still preparing for a CBDC pilot, the recent initiative shows that the Bank of Jamaica is on track to achieve its CBDC roll-out target of Q1 of 2022.
