The Islamic Republic of Iran may well become the first country to issue a national, state backed cryptocurrency.
Reports say Iran is considering launching a national cryptocurrency after U.S. President Donald Trump’s imposed tougher sanctions which are expected to isolate the oil rich country, cut off its access to the U.S dollar and severely weaken its official currency, the rial.
According to Iranian English language channel Press TV, the Iranian Minister of Information and Communications Technology, Mohammad-Javad Azari Jahromi, said on Wednesday that Iranian President Hassan Rouhani has ordered the country’s central bank to explore the possibility of using cryptocurrencies to transact international business and eliminate the dependency on the U.S dollar.
Cryptocurrencies are currently illegal in Iran and the Central Bank of Iran (CBI) is opposed to the idea of issuing a digital coin but Jahromi is confident that all of that is about to change.
“A new attitude that has been created in the government is that the digital money does not necessarily pose a security threat and can create opportunities for the country,” Jahromi said.
He told reporters that preliminary studies had already been carried out by the Iranian-based Post Bank, which is building the Islamic Republic’s electronic payment system, and heading the efforts to develop Iran’s state-backed coin.
Since they were first introduced about a decade ago, cryptocurrencies have struggled to catch on with governments around the world because of security concerns while the financial establishment remains unconvinced of its potentials to act as a store of value and a unit of exchange.
However, in a 4-month period, Iran has gone from issuing a statement effectively banning all financial institutions in the country from dealing in cryptocurrency to softening its stance and even exploring the possibilities of issuing a state-backed digital coin.