Iran to launch digital currency as SWIFT disconnects the country from its network

Wednesday 14 November 2018 00:27 CET | News

SWIFT, a global provider of secure financial messaging services, has ousted the Central Bank of Iran (CBI) from its financial banking system.

In response, the authorities in Iran have accelerated the development of their state-backed national digital currency called Crypto-Rial, News BTC have cited a local media source.

Informatics Services Corporation (ISC) representatives, a private tech subsidiary of the CBI, claim that their digital currency would eliminate the role of international financial settlement groups like SWIFT. It will be used in a distributed or one-to-one framework for transferring value without intermediaries.

The state now plans to deploy the Crypto-Rial on Iranian commercial banks in coming days which would enable them to use the tokens as a payment instrument in transactions and banking settlement. The underlying value of digital currency comes from its fiat supply.

The ISC official said that while distributing the crypto version of rials among Iran’s commercial banks, they would block an equivalent value of the conventional rial in the CBI account. It would create a 1:1 peg between the crypto and fiat version.

Moreover, the reason to launch a Crypto-Rial could go beyond the aim of circumventing US sanctions. The officials said that their pilot program is aimed at testing the potential of blockchain and crypto technology in running a financial system on both interbank and retail level.

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Keywords: SWIFT, bank messaging, Iran, cryptocurrency, Central Bank of Iran, CBI, financial messaging services, Crypto Rial
Countries: World