Iran is moving ahead with a crypto-currency “experimentation,” a government minister said days after the country banned crypto trading.
“The central bank’s (ban) does not mean the prohibition or restriction of the use of the digital currency in domestic development,” Mohammad Javad Azari-Jahromi, Iran’s IT Minister, said before further adding:
“Last week, at a joint meeting to review the progress of the (local cryptocurrency) project, it was announced that the experimental model was ready.”
That will now be presented to Iran’s banks for review and possible approval, but details of the project are very scarce.
It is unclear, for example, how exactly this crypto-currency works, on what blockchain it is based or whether it runs on its own blockchain, or whether it is a token, as well as whether it is really a cryptocurrency or just in name, and if it is, whether it would be accessible to all or just banks.
Nor did the minister provide much information in February when he announced plans for the pilot, back then he said:
“In a meeting with the board of directors of the post-bank on digital currency-based blockchains, it set out the necessary measures for the pilot implementation of the country’s first digital currency, using the country’s elite capacity. A pilot model for review and approval will be presented to the banking system of the country.”
That has now seemingly reached the stage of being ready to launch in the first experimentational stage, but as stated there is a considerable lack of information.
That may be as, in the wider context, Trump is ramping up pressure on Iran regarding denecularization and might impose fresh new sanctions on May the 12th.
That potential scenario has sent Iran’s fiat currency down plunging recently, leading the Iranian Central Bank to declare they are banning cryptos, presumably primarily to prevent capital flight and further devaluation.
In that context, the only crypto that might make sense here is one which evades sanctions, Venezuela style, but that would be a token and more correctly it would be called a tokenized bond rather than a crypto-currency.
But it could well be Iran is trying to see whether they can and/or should digitize their own fiat money, perhaps Dubai style. In which case, it would be quite an experiment indeed.