Central bank digital currencies, or CBDCs, are picking up pace in several nations around the world, and Iran is one of them. In the coming days, the country will gradually roll out its virtual currency 'digital rial' in a public pilot phase. The Central Bank of Iran (CBI) is leading the testing phase of the digital rial. As part of this phase, the digital currency will be issued to banking users as well as tourists visiting Kish Island to facilitate digital payments.
The digital rial pilot will be implemented on June 21, an official statement from the CBI said. For now, the trial will remain limited to the island of Kish.
“By scanning the barcode generated by the provided software, you make your purchases using new methods or transfer money to other customers' wallets,” the statement (translated from Persian) said.
CBDCs like the digital rial are blockchain-compatible digital representations of fiat currencies, allowing users to process fast online payments. The use of CBDC can lead to the reduction of central banks' reliance on cash notes, while recording a permanent trace of transaction history on the blockchain network.
According to the CBI, the digital rial will not require interbank settlements to facilitate the transfer of funds between buyer and seller. Instead, the funds will be instantly made available to the seller as soon as the purchase transaction is completed.
“According to the measures adopted, the digital rial facilitates the necessary capacities for the development of programmable or programmable money, which will be the driving force behind the formation of new business models, especially in the space of electronic commerce and the digital economy of country.” the CBI said in the statement.
India is currently among the nations that are in advanced testing phases of their respective CBDCs. In India, eRupee CBDC is distributed in the retail ecosystem. Several banks allow a small group of users to convert some of their money to the CBDC and test it to make payments via QR codes linked to the accounts of the recipients of the fund.
China, Japan, the UK and Russia are piloting their respective CBDCs. More recently, Ethiopia has decided to explore digital currency technology. In fact, in 2022, Nigeria launched its eNaira CBDC for widespread adoption.
