Iran Launches Gold-Backed National Cryptocurrency

Asia Blockchain Review
July 31, 2019

Iran’s first cryptocurrency, Paymon, is set to be unveiled with the permission of the Central Bank of Iran (CBI). According to Shahab Javanmardi, CEO of Iranian ICT firm FANAP, the digital currency will be backed by gold and is meant to circumvent the freezing of Iranian assets. 

Iran’s cryptocurrency will be supported by gold, but its function is similar to other cryptocurrencies. The crypto asset is designed to maximize the use of Iranian frozen bank assets,” Javanmardis said. 

Iranian Banks Collaborate with Blockchain Startup

Four major Iranian banks, namely Parsian Bank, Bank Pasargad, Bank Melli Iran, and Bank Mellat, worked with blockchain startup Kuknos Company since earlier this year to develop the gold-backed cryptocurrency Paymon, according to a report by The Financial Tribune. Meanwhile, Tokenpost reported that a select group of private IT companies will mine the crypto.

After the Trump administration pulled the United States out of the Iran nuclear deal and reimposed sanctions targetings its oil industry, the Arab nation has been exploring the crypto space, legitimizing crypto mining as an industry and initiating the development of a national digital currency. 

Crypto Allegedly Used to Circumvent US Sanctions

However, Washington has accused Tehran of using Bitcoin to circumvent US sanctions, taking advantage of the coin’s decentralized authority and immutability. The accusations came despite moves by the Iranian administration to address power consumption by crypto miners, which have taken advantage of significant state subsidies on energy. 

Apart from Iran, it is reported that more than 70 percent of countries in the world are tapping into the cryptocurrency domain. It is expected that more national digital currencies will be launched by other governments in the near future. 


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