Iranian authorities are expanding the pilot project of the central bank digital currency (CBDC) with the digital rial becoming available in the Kish Island free economic zone.
The Central Bank of Iran (CBI) announced the expansion of its CBDC pilot project focused on domestic micropayments. Limited public trials of the digital rial will take place in the Kish Island free economic zone, in collaboration with Mellat Bank and Tejarat Bank.
During the pilot project, the Iranian digital currency will be accessible to banking sector clients and tourists. The digital rial can be used for purchasing goods and services, requiring users to install a specific digital wallet and scan a special QR code for transactions.
The digital rial will serve as an additional payment method alongside cash and bank cards. Unlike other forms of electronic money commonly used in the country, CBDC payments don’t involve interbank settlements; funds are transferred directly between buyers and sellers.
According to a press release, the development of the digital rial aims to lay the groundwork for a digital economy and meet the country’s demand for advanced payment methods. The Iranian CBDC promises a simpler and more secure payment process compared to other digital payment methods available in Iran.
Among the project’s key objectives are enhancing Iran’s payment infrastructure’s stability and resilience, fostering the digital micropayment market, developing new payment instruments, and managing risks associated with private payment systems. The CBDC is also expected to play a role in developing programmable money, driving Iran’s digital economy forward and facilitating new business models, particularly in e-commerce.
The Central Bank of Iran initiated testing of the digital rial in September 2022, progressing through several testing phases before moving to practical trials.
