Iran is creating a state-backed cryptocurrency. The options for the digital token are currently open. Reportedly, it’s initially only for crypto companies to do business with the Central Bank of Iran. Later, it will be used as a means to facilitate payments between Iran and other countries for goods and services. Iran was kicked off the SWIFT network last year, essentially disabling their ability to trade efficiently. In response, Russia and other partner nations announced they’re working on a SWIFT-alternative using the blockchain.
Iran’s cryptocurrency doesn’t have a great track record against the US dollar.
The Iranian rial is currently equivalent to $0.000024. To buy this laptop, it therefore requires 29 million rials. That’s if you could get anyone to convert your rial into USD for you, of course.
First of all, let’s be clear. State-backed cryptocurrencies are not cryptocurrencies at all. Necessarily, they will require some form of command and control structure. Several countries have been considering the development of e-fiat for years. Most countries don’t have the same incentive to make such a system work, however. Iran sees the blockchain as an avenue to secure its future survival without sacrificing its sovereignty and “right” to pursue a nuclear weaponization program.
For crypto traders, the token could be a means to make money. Depending on how its implemented, a new market could open up. Several questions arise when considering the Iranian entry into blockchain tokens.
Iran’s crypto rial is reminiscent of Venezuela’s ill-conceived “petro” cryptocurrency. | Source: AP Photo/Ariana Cubillos
First, how will western governments like the United States,