Iran pushes to rein digital assets with the launch of ‘crypto rial’

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Iran has been home to a vast number of BTC miners over the last two years and made significant stride in the adoption of virtual currencies as a means of evading economic sanctions.

However, Iran is not keen on advocating for widespread local use of virtual assets for payments. The Central Bank of Iran (CBI) has announced that it will begin the pilot launch of its central bank digital currency (CBDC), which it dubbed “crypto rial,” to promote financial inclusivity.

A key feature of the central bank’s CBDC design is its military-grade security feature, making it difficult for bad actors to steal from users. According to a local publication, the bank says that the digital version of the Iranian rial will take cognizance of privacy concerns and potential challenges during the tests.

The banking regulator noted that it would adopt a phased approach in the CBDC development to reduce the chances of errors. Al Jazeera reported that Iran’s CBDC would leverage the Borna platform, an IBM open-source distributed ledger technology (DLT) platform.

The CBDC adoption will also see banking institutions switch from traditional paper rials to electronic ones. Iran noted that the phased rollout of the program would be participated by selected banks due to Borna being a permissioned ledger.

Southeast Asia tightens the noose for regulators

In neighboring Southeast Asia, the terrain for digital assets has been jagged over the last couple of months following the decision of regulators to crack down on erring firms. In particular, Indonesia is leading the charge in the region, with its commodity regulator plotting to issue sweeping reforms.

The country’s Commodities Futures Regulatory Agency disclosed that in the coming months, it could issue a rule for at least two-thirds of directors at digital asset firms to be Indonesians. The Commission’s head Didid Noordiatmoko rationalized the proposed decision as a move to stop directors “from fleeing the country if any problem arises.”

Problems in the sector have been frequent since March as digital asset prices tumbled due to unsavory macroeconomic conditions. The effect was disastrous for the industry as several firms were forced to shut down operations to stay afloat, with local exchange Zipmex also suffering the same fate.

The reaction of Indonesian authorities was swift as they sought to prevent a recurrence of the events. Jerry Sambuaga, Deputy Minister at Indonesia’s Ministry of Trade, noted that other agencies would pass more stringent rules for operators in the space, such as the requirement for $6.7 million as the minimum capital requirement for virtual currency firms.

Sambuaga revealed that aside from a majority of directors being “domiciled in Indonesia,” operators might be required to use third-party custody providers as an extra security layer for investors’ funds.

In Thailand, earlier this September, the Securities and Exchange Commission bared new measures to regulate the digital asset market through strict control over advertisements. Under the latest mandate, only digital asset advertisements based on facts will be allowed to be made public.

Thai authorities stressed that this would not only uphold transparency but will ensure that potential investors are protected from the risks of entering the industry.

Watch: The Future of Banking, Financial Products & Blockchain