https://ift.tt/1BWXQtI shuns crypto payment and prepares to pilot crypto rial

TL;DR Breakdown

• Iran makes preparations to launch its digital currency, crypto rial.
• Bitcoin and Altcoins are no longer regarded as legal currencies in the Islamic nation.

According to a high-ranking Iranian government official, the country will not accept cryptocurrencies as a means of payment. The Islamic Republic of Iran is reportedly pushing for its “crypto rial.” The announcement followed the Central Bank of Iran’s announcement of regulations for creating and using digital coins in the country.

Iran picks crypto rial over Bitcoin for payments

The Islamic Republic of Iran will no longer regard cryptocurrencies like Bitcoin as legal currency. According to the country`s deputy communications minister, Reza Bagheri Asl, discussing regulatory issues surrounding cryptocurrency storage and trade, cryptocurrencies such as Bitcoin are not considered legal tender in the country: “We do not recognize payments with crypto.”

The government official was referring to the Digital Economic Working Group’s most recent position on cryptocurrencies. He stated that any use of a foreign currency is contrary to Iran’s monetary and banking legislation and its sovereignty.

“So, we will by no means have any regulations recognizing payments with cryptocurrencies that do not belong to us,” Bagheri Asl elaborated, quoted by the Iranian financial news portal Way2pay. “Iran has its national cryptocurrency, so no payments will be made with non-national cryptocurrencies,” he insisted.

The deputy minister stated that to protect the Iranian people from danger, digital asset exchange in the country would be subjected to a set of regulations comparable to those that exist for the stock market and other currencies. He stated, “cryptocurrencies must be regulated, and banking systems must be observed.”

Iran has a complicated history with cryptocurrency. The nation’s position on Bitcoin and other cryptocurrencies has fluctuated in recent years. In May of 2021, Iranian authorities prohibited the domestic trade of crypto assets acquired outside the nation’s borders in order to slow capital flight. The government saw the decision devaluing the rial and weakening the Iranian economy.

The decision to cease bitcoin transactions came a month after its central bank announced that licensed businesses and money changers could utilize crypto produced by Iranian miners. The policy intends to assist the country in navigating its sanctions while also encouraging economic development.

The Central Bank of Iran dives into a CBDC project

The nation`s Central Bank has announced that it has informed banks and credit institutions about the crypto rial’s rules. The country’s prospective central bank digital currency is the crypto rial (CBDC), one intended to take crypto’s position in the country. CBDCs have become the new trend among nations here is why.

According to reports, the regulations cover the production and issuance of this digital currency. The guidelines stated that the CBI would mint crypto rials and that their maximum amount would be determined solely by the CBI. The government previously announced that crypto rial would become its new money, comparable to fiat but digital.

Tehran officials have previously looked at allowing Iranian companies to use decentralized digital currencies for settlements with foreign partners to get around Western financial restrictions. However, they are now focusing on the country’s digital fiat currency, the rial.

The “crypto rial,” as it is known, has been in the works for a long time. The CBI’s requirements apply to creating and distributing the central bank digital currency (CBDC). It will be the only issuer, with a maximum supply determined as a result of which it will exclude the crypto sector.

According to Way2pay, the cryptocurrency structure is based on a distributed ledger technology maintained by authorized financial organizations and can execute smart contracts. As per the publication, the infrastructure and regulations for the CBDC have concluded, and it will be put into practice soon.

The news states that the legal standards will issue the crypto rial for money printing and issuing. The CBI will keep an eye on the economic impact of cryptocurrencies while also managing their influence in accordance with the authorities’ monetary strategy. Users will be limited to making transactions only within the country, as the global market does not recognize crypto rial as a global currency.