Starting June 21, Iran’s Central Bank Digital Currency (CBDC), the digital rial, will be accessible to banking customers and tourists on Kish Island for domestic micropayments. Kish Island, Iran’s second-largest island in the Persian Gulf, will serve as the initial location for this significant development in Iran’s digital currency initiative.
The Central Bank of Iran (CBI), also known as Bank Markazi, announced this development in a recent press release, stating that it is part of its plans for the operational phase of the digital currency and its goals to modernize and streamline domestic transactions.
The CBI emphasized the digital rial’s role in enhancing micropayments, underscoring its importance in improving the overall payment landscape in Iran. According to the CBI, unlike other types of electronic money commonly used in the country, which require interbank settlements through bank accounts and common payment tools such as bank cards, the digital rial allows for immediate fund transfers between the buyer and the seller without needing interbank settlements.
“Payment with this method is much easier than common card payment methods while increasing payment security,” the CBI noted. The bank highlighted that the funds are sent as soon as the transfer is completed, enhancing both efficiency and security in transactions.
Since 2022, the Central Bank of Iran has been conducting limited pilot tests of its digital currency. The primary objective of these tests and the subsequent launch is to lay the foundation for Iran’s digital economy and address the evolving needs of the sector. The CBI stated that the digital rial would bolster the resilience and stability of Iran’s payment infrastructure. It aims to revive the role of electronic banknotes in small payments, enhance efficiency, introduce new payment tools, and manage risks associated with the proliferation of private money.
At the time, the Iranian government also reportedly declared that no digital currencies, including cryptocurrencies like Bitcoin, would be allowed as means of payment in the country. With this move, the authorities further positioned the digital rial as the sole digital currency for transactions within Iran.
READ MORE: Iran Will Only Accept Its Digital Rial, Not Cryptocurrencies – DeFi Planet
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