Iran is one of the countries that decided to create a national cryptocurrency. The main intention is to avoid US economic sanctions, but that remains to be seen. Informatics Services Corporations (ISC), the banking services provider in the Asian country, has unveiled details about the country’s virtual currency.
Iran’s National Cryptocurrency
ISC has decided to reveal some attributes of the National Cryptocurrency of the Islamic Republic of Iran. The ISC is affiliated to the Central Bank and it has been established back in 1993. Apparently, the new crypto will be backed by Iran’s currency and will be based on Hyperledger Fabric.
The ISC explained about this virtual currency:
“It is rial-backed and has been designed and developed by Informatics Services Corporations based on Hyperledger Fabric platform technology.”
The Hyperledger Fabric is an important and recognized open-source permissioned blockchain that is hosted by the Linux Foundation. The platform has been built by IBM and Blythe Masters’ Digital Asset Holdings. Additionally, it specializes in smart contracts for supply chains and can have different other uses. This new virtual currency will be working for Iranian Banks and active companies in the crypto space. According to the ISC, the blockchain infrastructure is going to be developed in different phases.
The first phase will be as a ‘token and interbank payment instrument,’ and the second will be used as ‘an instrument for retail payments in a society.’ That means that the currency will be used, at the beginning, by banks and other financial institutions that need to process payments. After being deployed in the financial system, it will expand to the rest of the society.
The ISC commented:
“Iranian cryptocurrency has been developed under private blockchain infrastructure and it cannot be mined. The issuer is [the] Central bank of Iran and the volume of issuance depends on the bank’s decision.”
Iran has a very active crypto community that is searching for Bitcoin when the economy becomes fragile. Back in May, Mohammad Reza Pourebrahimi, head of the economic committee of Iran’s parliament, said that individuals and companies sent over $2.5 billion dollars to buy cryptocurrencies. At the same time, in July, he said that 500 BTC that belonged to Iranians were seized by the US government.
Since the US increased the pressure on Iran, the country has speeded up its plans to launch its own virtual currency. However, issuing a cryptocurrency as a solution to financial problems does not seem to be the best option to end with an economic crisis. We have as an example Venezuela, that issued the Petro and the economic problems seem to be even worse than in the past. According to the International Monetary Fund (IMF), the inflation in the South American country could reach 1 million percent.
Another thing to mention is that Iran wants to reduce its dependence on the US dollars as a currency. Something similar to what Turkey has hinted in the last weeks after a crisis with its national fiat currency the Lira.