The Central Bank of Iran is advancing on its plans to launch a digital version of the national currency, the rial. The Central Bank of Iran (CBI) recently completed the preliminary phase of the country’s central bank digital currency (CBDC), according to an official statement from the CBI’s research arm, the Monetary and Banking Research Institute (MBRI). The news was announced by Mohammad Reza Mani Yekta, head of CBI’s payment systems supervision office, at the 9th annual conference on electronic banking and payment systems on February 20.

Mani Yekta stated that the pre-pilot phase ended successfully, with valuable achievements. The CBDC pilot will soon be released in other ecosystems and will be used by more users. He also noted that the rules governing the digital rial will align with those established for rial banknotes. The CBDC will be distributed among individuals and banks, and its infrastructure will recreate some blockchain features.

According to reports, ten banks in Iran applied to join the digital rial project, including Bank Melli, Bank Mellat and Bank Tejarat, which participated in the pilot phase. All banks and credit institutions in Iran are expected to start offering e-wallets for the digital currency. The CBDC pilot aims to improve financial inclusion and compete with global stablecoins.

The CBI began planning to launch a CBDC pilot program in January 2022, following years of initial research since 2017. The regulator reportedly began implementing the CBDC pilot program in September 2022. The rial project Iran’s digital currency, also known as “cryptorial”, is pegged to the national currency at a 1:1 ratio. The digital currency runs on a platform known as Borna, which was developed using Hyperledger Fabric, the open source enterprise blockchain platform established by IBM.

The news comes amid reports that Iranian authorities are preparing to meet Bank of Russia Governor Elvira Nabiullina, who is expected to visit Iran in the near future. According to reports, Russia and Iran have been working together to create a gold-backed stablecoin that would serve as a method of payment in foreign trade. While the two projects are separate, both indicate a trend towards the use of digital currencies to facilitate cross-border transactions.