Iran to start public pilot for digital currency on Kish Island

Iran’s central bank is preparing to launch a pilot for its digital rial, allowing cashless transactions for banking customers.

The Central Bank of Iran (CBI), also known as Bank Markazi, announced the operational phase of its digital currency, known as the digital rial, with the aim of modernizing and simplifying domestic transactions.

In a press release seen by Crypto.news, the central bank said the pilot is planned for July and will allow banking customers and tourists on Kish Island to shop and transfer money using digital wallets and QR codes. The CBI says the digital rial will improve the resilience and efficiency of the region’s payment infrastructure and create “new business models, particularly in e-commerce and the digital economy.”

Iran’s central bank has been testing the digital currency since 2022 in a limited pilot phase starting in June 2023. The CBI claims that the government-controlled digital currency “not only improves payment security but is also much simpler than traditional card payment methods.”

In February, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions against a network of entities accused of facilitating “the illicit export of goods and technology from more than two dozen U.S. companies to end users in Iran.”

Among those sanctioned was Iran-based Information Services Company (ISC), a subsidiary of the Central Bank of Iran and responsible for the development of the central bank digital currency platform (CBDC). OFAC stated that ISC was sanctioned for “materially assisting, sponsoring, or providing financial, material, or technological support or providing goods or services” to CBI.

As crypto.news reported, ISC began working on the digital rial in 2018 using Hyperledger Fabric, a blockchain framework hosted by the Linux Foundation.