Iran’s Crypto Solution to Take on Trump: A Digital Currency With Bitcoin Features

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An official document detailing the specifications of an Iranian national digital currency based on the rial and blockchain technology has been drafted.

IBENA, a news outlet and affiliate of the Central Bank of Iran, reports that the Informatics Services Corporations (ISC), also an affiliate of the Central Bank of Iran, has released the following information on the digital currency.

Key Findings
  • The digital currency is backed by the rial.
  • The issuer is the Central Bank of Iran.
  • The Central Bank will control the volume of the centralized digital currency.
  • It will live on a private blockchain infrastructure.
  • It cannot be mined.
  • The infrastructure is intended for an ecosystem of Iranian banks and cryptocurrency-related companies.
  • The digital currency is designed and developed by ISC based on Hyperledger Fabric Platform technology, an open source blockchain framework. Hyperledger Fabric was initially contributed by Digital Asset and IBM, as the result of a hackathon.

The implementation of a government-backed “cryptocurrency” would allow the country to skirt US sanctions that are intended to stop its access to the global economy. The sanctions affect Iran’s ability to purchase or acquire US dollar banknotes, gold and precious metals, as well as impact Iranian rial transactions, sovereign debt and the country’s automotive industry.

The wave of new sanctions were imposed earlier this month. In November, a new round of sanctions on Iran’s oil and gas reserves will be reimposed.

CNN reports,

“Iran has been described as the ‘Germany of the Middle East,’ the last major emerging market to open fully to the outside world, with more than 80 million consumers, a highly educated population and an array of natural resources – including precious metals.

The sanctions could torpedo Iran’s efforts – at least for the remainder of the Trump administration – to realize its full potential.

Iran needs access to foreign currency and Washington is applying the full weight of the US Federal Reserve to block efforts by Tehran’s new central bank governor to provide relief to Iran’s exporters and importers.”

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Bobby Lee, CEO and co-founder of the first Bitcoin exchange in China (BTCC) and former vice president of technology for Walmart’s e-commerce business in China, tweeted that Iran could avoid economic disruption by embracing Bitcoin.

Although the newly proposed national digital currency fundamentally differs from Bitcoin and similar decentralized cryptocurrencies, which are mined through consensus and are traded on a public, open, decentralized blockchains, it emulates Bitcoin by empowering people to transfer value outside of the existing financial system.

According to a local news report, Alireza Daliri, the deputy for management and investment affairs of the Directorate for Scientific and Technological Affairs of the Presidential Office, said that the currency “would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.”

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