In a bid to dodge the economic sanctions being imposed by the United States, Iran is moving closer to developing its own digital currency, which will tokenize the rial (Iran’s national fiat currency).
According to local media sources, the creation of a national digital currency has long been on the agenda for Iran’s Directorate for Scientific and Technological Affairs of the Presidential Office. As per the ISNA news agency, Alireza Daliri (the department’s deputy for management and investment affairs) announced:
“We are trying to prepare the grounds to use a domestic digital currency in the country.”
“This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions,” he added.
Daliri went on to state that there are multiple companies based in Iran which have the expertise required to develop a digital currency, and are working on the project in collaboration with the Central Bank of Iran.
The decision to develop a domestic digital currency comes after United States president Donald Trump pulled out of a 2015 nuclear agreement with Iran earlier this year in May, and simultaneously announced that the US would be reinstating prior economic sanctions on Iran (which cut off Iran’s access to US dollars, among other restrictions). The renewed sanctions will come into effect from August 6.
Earlier this month, Cryptovest reported that Iranian lawmakers were seriously considering the option of cryptocurrencies as a way to evade US sanctions and subvert the US dollar’s hegemony.
Iran’s move is somewhat similar to Venezuela’s launch of its oil-backed digital currency – the Petro, which has since been banned in the US. More recently, Venezuela has announced the launch of a new national currency which will be pegged to the Petro.