Iran’s Central Bank is preparing to introduce its digital currency, the Digital Rial, as part of attempts to modernize the country’s banking system and overcome international sanctions. Mohammad Reza Farzin, Governor of the Central Bank of Iran (CBI), announced the plans during the Modern Banking and Payment Systems Conference in Tehran on November 25.
The digital rial has been in development since 2018, using open-source technology. Kish Island, a free trade zone, initiated a trial project in June 2023 to concentrate on retail transactions within Iran. This digital currency will be critical to the country’s efforts to align with changing global banking standards and improve financial transactions both locally and abroad.
In response to the problems created by sanctions, the CBI has sought to strengthen its digital financial infrastructure. Farzin announced the linking of the country’s Shetab payment system, renowned for processing transactions in less than two seconds, to Russia’s MIR payment system, offering an alternative to SWIFT. We expect this integration to enhance cross-border transactions, especially between Iran and Russia, and to lessen the impact of sanctions.
Furthermore, Iran is improving its financial ties with the BRICS countries, which are increasingly focusing on minimizing reliance on established financial networks. The digital rial is part of a larger goal to keep Iran’s financial system efficient and resilient, leveraging innovative solutions to overcome economic constraints.
The introduction of the Digital Rial is more than just a financial innovation; it is Iran’s strategic attempt to strengthen its economic sovereignty while adapting to the worldwide transition toward digital currencies and decentralized payment systems.
