The Deputy of Investment and Management Affairs of the Iranian Directorate for Scientific and Technological Affairs in the President’s Office, Alireza Diliri, has indicated that developing a national cryptocurrency is on the agenda. Government-run IRNA news network said a national cryptocurrency would be launched in the next three months after removing shortcomings, and a national standard cryptographic key had already been developed.
This report from the IRNA suggests Iran is developing this technology from the ground up, using its own new cryptographic standard, instead of using pre-existing cryptographic algorithms. This is perhaps not surprising since the United State’s National Security Association (NSA) developed the SHA-256 cryptographic algorithm used by Bitcoin. Iran would want to use encryption that the US would not understand since this cryptocurrency is being made in response to heavy international sanctions that are progressively going into effect and will be at full force by November 2018, following the US decision to dissolve the Iran nuclear pact.
Alireza Diliri says, “We are trying to prepare the grounds to use a domestic digital currency in the country. This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.”
He said a large number of Iranian companies were working together to develop the cryptocurrency, and the Central Bank of Iran is helping in the process.
Iran now joins a small but growing list of nations that are launching state-backed cryptocurrencies, including the Bahamas and Venezuela. The details of Iran’s national cryptocurrency have not been disclosed. Iran has banned Bitcoin and other cryptocurrencies to prevent money from leaving the country during this time of rapid inflation.
Once the national cryptocurrency of Iran is launched, it will have tremendous potential for growth. It could be a safe haven for money, since the fiat currency of Iran, the rial (IRR), is rapidly devaluing, and it will be the only cryptocurrency allowed in Iran. However, how safe this cryptocurrency is for storing money depends on the parameters of the cryptocurrency, since Iran could code it so it can be printed like fiat, and can also code it so they can seize it out of accounts at will. It will likely have to be a centralized cryptocurrency for the Central Bank of Iran to give it approval.
The main point of this cryptocurrency is to send money across borders once international sanctions are fully in effect, since Iran will be banned from the international financial network. They will need something cryptographically-secure like a cryptocurrency to transact money securely.
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