Iran Ready to Use Digital Currency to Fight Western Sanctions

Iran is preparing to introduce its own central bank digital currency (CBDC), according to Mohammad Reza Farzin, the governor of the Central Bank of Iran (CBI).

Speaking at a banking conference on November 25, Farzin highlighted the country’s robust digital financial infrastructure and emphasized that the CBDC is part of Iran’s broader strategy to keep its financial system modern, especially amid ongoing international sanctions.

The upcoming launch of the digital rial, which has been in development since 2018, is aimed at enhancing the efficiency and security of Iran’s banking sector. Farzin noted that the CBI’s goal is to lead innovation in banking, in line with global trends.

The digital rial, built using open-source Hyperledger Fabric technology, has already completed its “pre-pilot” phase in collaboration with major Iranian banks. A pilot project for the retail CBDC was also launched earlier this year in Kish Island, an Iranian free trade zone popular with tourists.

While sanctions continue to pose challenges, the CBI is making strides in adapting its payment systems. Farzin pointed out the integration of the Russian MIR payment system with Iran’s ACU system, effectively replacing the SWIFT network. He also mentioned that Iran’s Shetab system, which processes transactions in under two seconds, is among the most efficient in the region and is in the early stages of connecting with Russia’s MIR network.