The Islamic State of Iran could potentially announce a state-backed cryptocurrency today at the annual Electronic Banking and Payment Systems Conference, which is being held in Tehran, from January 29, reports Al Jazeera.
The step is being taken to work an alternative route around the US sanctions that are crippling Iran’s economy with many believing that the Iranian cryptocurrency might help it achieve this motive.
The Conference theme this year “blockchain revolution” is pretty relevant to the announcement.
Iran Hit Hard By US Sanctions
The volatile Donald Trump is at the head of the sanctions imposed on Iran back in 2018 over what he described as “malign activities” being pursued by the Islamic state.
The result being by November, Iran was unceremoniously thrown out of the Society for Interbank Financial Telecommunication (SWIFT)
This was the single biggest blow Iran’s economy since Iranian traders could no longer engage in foreign trade and were unable to make and receive cross-border payments.
Many believe that the reason behind the development of a state-backed cryptocurrency is to allow Iran to continue foreign trade activities and transactions as the SWIFT ban prohibits dealings in fiat currencies.
Expect Iranian Crypto in Phases
In its article, Al Jazeera states that the state-backed cryptocurrency would possibly be rolled out in two phases.
First, the foundations for crypto Rial would be laid, which would help to facilitate monetary transactions between the country’s banks and Iranian financial and non-financial institutions alike, currently involved in the crypto trade.
Second and supposedly coming at a later stage, is a system for the general Iranian public to trade in local goods and services.
Iran’s cryptocurrency might even pave the way for an international payment network, based on the basics of blockchains, which could be touted as an alternative to SWIFT.
However, for initial use, all pointers indicate a domestic use for the digital currency at this point in time.