Iran has unveiled a document detailing its plans for a national digital currency that is to run on a private blockchain based on the Hyperledger Fabric.
We haven’t seen the document itself, with details remaining sparse, but Saeed Mahdiun (pictured), Deputy Director at Informatics Services Corporations told a local media paper affiliated with Iran’s Central Bank that the crypto will be Rial backed.
They say the Central Bank can print as much of it as it wants, with the crypto not mineable. It will initially be in the testing phase, but afterwards it might become accessible to commercial banks. They say:
“Other functions of this blockchain infrastructure include phase one as a token and interbank payment instrument and phase two as an instrument for retail payments in a society.”
In other words, the idea here seems to be a centralized digital currency whereby central bank money is accessible to all, something which would have considerably implications for the commercial banking system.
We’ll have to wait for details on how exactly this will work. Not lease because a central bank node could be very vulnerable in certain set-ups as if it is hacked, then one can print for himself as much as he or she wants.
Other nodes running alongside might not change that calculus because blockchain tech doesn’t work very well if it needs external or human input, as it would in this case regarding issuance.
Making it surprising they’re going for a centralized crypto which would probably take years to fully deploy, rather than tokenized bonds or fiat tokens.
They are, however, becoming very fond of cryptocurrencies which they seemingly see as a way to subvert sanctions after discussions appear to be on-going regarding a potential embargo from SWIFT. A local paper says:
“Iran looks to digital currencies as a way to bypass US sanctions that heavily restrict its access to the international financial system. The country’s top officials seemingly support the idea of embracing digital currencies.”
They seemingly plan to lift a ban on cryptocurrencies, with a decision to be made next month.