The Central Bank of Iran (CBI) has initiated a public pilot program aimed at domestic micropayments with the introduction of the national digital currency.
On June 18, the CBI officially announced the launch of a pilot scheme for Iran’s central bank digital currency (CBDC), known as the digital rial. Starting June 21, coinciding with the beginning of the Tir month in the Iranian calendar, the pilot will be operational primarily on Kish Island.
Kish Island, the second largest island in the Persian Gulf covering an area of 92 square kilometers, is renowned as a major tourist destination, attracting approximately 12 million visitors annually. As one of Iran’s free trade zones, Kish Island allows visa-free entry for tourists from numerous countries.
The pilot program on Kish Island marks an expansion of the digital rial’s trial phase that commenced in 2023, enabling both banking customers and tourists to utilize the digital rial for transactions. Payments can be processed via a barcode scanning method using designated software, offering a new avenue alongside conventional cash and bank cards.
Unlike traditional electronic payment methods reliant on interbank settlements, the digital rial ensures instantaneous fund transfers between buyers and sellers upon completion of transactions. This method enhances payment efficiency while bolstering transaction security, as highlighted by the CBI.
Moreover, the digital rial aligns with Iran’s strategy to foster a digital economy and enhance the country’s payment infrastructure, particularly in facilitating domestic micropayments. The CBI underscores its commitment to confining the usage of digital rial within Iran’s borders for domestic economic purposes.
In a broader context, Iran has adopted a varied approach towards cryptocurrencies such as Bitcoin (BTC), permitting their purchase and sale while prohibiting their use as payment for goods and services. Since 2018, Iran has regulated its local cryptocurrency mining sector, which has drawn concerns from U.S. Senators regarding potential national security implications.
This initiative positions Iran at the forefront of digital currency experimentation, laying the groundwork for future innovations in financial technology and economic development within the region.
(Source: The Tehran Times, Image Source: [insert image source])