With several cryptocurrencies backed by US dollars, it seems more countries are now embracing digital assets that are less volatile. This was the case with Russia and is now seen with Iran trying to launch its first stablecoin. The new cryptocurrency will be backed by the country’s national currency called, Rial.
Informatics Services Corporation Develops Iran’s National Currency
Informatics Services Corporation is the company responsible for the development of the coin. It was developed using IBM’s Blockchain framework known as Hyper-ledger Fabric Platform technology. This is a coin that cannot be mined and its value will be based on that of Iran’s fiat money.
Seyyed Abotaleb Najafi, the CEO of the company said the coin needs to be approved by the Central Bank of Iran (CBI) before its use. Once it is approved, it will be issued to banks and even other sectors of the country. Specifically, it will be issued to commercial banks to use as a token for carrying out banking settlements.
The CEO also noted that there were still banks in the country that were operating in the traditional way. As such, their methods of operation needed to change and evolve in order to bring about efficiency in the sector. Therefore, this coin will lead to the renovation of the country’s banking system and recreate its infrastructure.
Digital Asset to Solve Issues Relating to Untraceable Transactions
Iran has publicly voiced its stance when it comes to cryptocurrency and how it can help to solve the issues of untraceable transactions. This was the opinion of Brigadier General Gholam Reza Jalali, the head of Iran’s Civil Defense Organization. He believes that cryptocurrency is what the economy needs especially in its most trying times.
The Brigadier General also pointed out that the country’s over-reliance on US-dollars to handle its transactions will be reduced. According to him;
Our major problem here is the US dollar, because the United States uses its national currency to control any country’s SWIFT operations, so we should reduce dependence on the dollar and replace it with another currency.
Deducing from the statement above, the country believes that the US is interfering with other countries policies since they are issuers of a global currency. Therefore this digital asset will give Iran more control of its monetary policies. In addition, it may help to stabilize the Rial’s price given that it currently trades at 41,000 Rials to a dollar.