The Central Bank of Iran (CBI) is taking its first steps into the world of central bank digital currencies (CBDCs) with a pilot program launching on June 21st. The digital rial, Iran’s CBDC, will be available to bank customers and tourists visiting Kish Island, a popular free-trade zone in the Persian Gulf.
This public pilot marks an expansion of the digital rial’s testing phase, which began in 2023. Tourists and residents on Kish will be able to use the digital rial for micropayments by scanning a barcode through special software. This offers a faster and more secure alternative to cash and traditional card payments, as the digital rial bypasses the need for interbank settlements.
The CBI emphasizes that the digital rial is designed for domestic use and microtransactions. This pilot program serves several key objectives:
- Developing the Digital Economy: The digital rial aims to lay the foundation for Iran’s digital economy, fostering innovation in the payment sector.
- Enhancing Micropayments: This new payment method is particularly suited for small transactions, streamlining everyday purchases.
- Boosting Payment Infrastructure: The CBI highlights the digital rial’s potential to strengthen and modernize Iran’s payment infrastructure.
- Managing Risks: The CBI views the digital rial as a tool to mitigate risks associated with private digital currencies.
Also Read: Ethiopia Gears Up For Digital Currency: 18 African Nations Join The CBDC Race
Iran’s stance on cryptocurrencies like Bitcoin remains complex. While allowing cryptocurrency trading, the government prohibits their use as payment for goods and services. Additionally, Iran regulates its domestic cryptocurrency mining industry due to concerns raised by the U.S. regarding potential sanctions evasion.
The digital rial pilot on Kish Island is a significant step for Iran’s financial system. By testing the CBDC in a tourist-friendly environment, the CBI can gather valuable data to inform the future of digital payments in the country. The program’s success could pave the way for a wider rollout of the digital rial, potentially transforming Iran’s financial landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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