Iranian Banks To Issue Gold-Backed Digital Currency

February 5, 2019 11:45 PM

Iran has developed a gold-backed digital currency, according to Iranian newspaper the Financial Tribune. The new currency was developed by blockchain startup Kuknos Company in consultation with four Iranian banks: Bank Mellat, Bank Melli Iran, Bank Pasargad, and Parsian Bank. An over-the-counter crypto exchange, Iran Fara Bourse, will use the new digital currency as well.

The currency is called PayMon, which means ‘covenant’ in Persian. While PayMon will be backed by gold, Kuknos also has plans to tokenize the “assets and excess properties” of Iranian banks.

Iran has taken its time introducing the PayMon, but now that it’s seemingly here, one wonders whether it is the national digital currency Iranian officials first hinted at in February 2018. It was thought that the national digital currency, which the country announced plans for in July 2018, would be backed by the rial.

At the time, Alireza Daliri, deputy for management and investment affairs at Iran’s Directorate for Scientific and Technological Affairs of the Presidential Office, explained the purpose of trying to introduce a national digital currency:

“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.”

Aside from PayMon, recent reports indicate that Iran has issued new regulations regarding the use of cryptocurrencies. These new regulations stipulate that only pre-approved versions of cryptocurrency can be used in the country. Adding any kind of services related to crypto in one’s digital wallet is expressly forbidden.

Even though these regulations are very restrictive, they do overturn a previous law that banned the trade of crypto and its use as a form of payment.

In December 2018, the US House of Representatives and Senate both introduced bills, called the Blocking Iran Illicit Finance Act, calling for sanctions on any country that knowingly provides Iran with funding or tech support related to the creation of a national digital currency.

Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.

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