Iran Completes Pre-Pilot Phase for Digital Rial

Iran’s Central Bank is making progress with its plans to launch a digital version of the national currency, the rial. The Central Bank of Iran (CBI) recently completed the pre-pilot phase for the country’s central bank digital currency (CBDC), according to an official statement by CBI’s research arm, the Monetary and Banking Research Institute (MBRI). The news was announced by Mohammad Reza Mani Yekta, head of the CBI office for supervising payment systems, at the ninth 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 launched in other ecosystems and 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.

Ten banks in Iran have reportedly applied to join the digital rial project, including Bank Melli, Bank Mellat, and Bank Tejarat, which were involved in the experimental phase. All banks and credit institutions in Iran are expected to start offering electronic wallets for the digital currency. The CBDC pilot aims to improve financial inclusion and compete with global stablecoins.

The CBI started planning to launch a CBDC pilot in January 2022, following years of initial research since 2017. The regulator reportedly started rolling out the CBDC pilot in September 2022. Iran’s digital rial project, also known as the “crypto rial,” 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 with the Bank of Russia’s governor, Elvira Nabiullina, who is expected to visit Iran in the near future. Russia and Iran have reportedly been working together to create a gold-backed stablecoin that would serve as a payment method in foreign trade. While the two projects are separate, they both indicate a trend toward digital currencies being used to facilitate cross-border transactions.


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Binance Has Enabled Iranians Transact $8 Billion Despite Sanctions

Since 2018, crypto exchange Binance has carried out Iranian transactions worth $8 billion despite being slapped with U.S. sanctions, according to Reuters. 

Reportedly, approximately $7.8 billion has flowed between Nobitex, Iran’s largest crypto exchange, and Binance based on data availed by blockchain analytic firm Chainalysis. 


Per the report:

“Three-quarters of the Iranian funds that passed through Binance were in a relatively low-profile cryptocurrency called Tron that gives users an option to conceal their identities.”

The U.S. sanctions are meant to cut off Iran from the global financial system. Nevertheless, Nobitex has devised ways to circumvent them because it encourages its users to utilize Tron, a mid-tier token, for anonymous trading. 


Industry data indicated that Binance was the largest crypto exchange for Tron trading. Per the report:

“The total volume of Iranian transactions flowing through Binance is far greater than through any other exchange. After Binance, the next most popular exchange for Nobitex users since 2018 was Seychelles-based KuCoin, which processed $820 million in direct and indirect transactions.”

Apart from Tron, the other cryptocurrencies used in Iranian transactions included Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Tether (USDT), and Litecoin (LTC).


The report also disclosed that crypto worth $5 billion was transacted between Binance and Iranian exchanges using intermediary layers. 


Binance has reiterated in the past that it does not aid illicit funds based on its transaction monitoring tools. Patrick Hillmann, Binance spokesperson, stated:

“Binance uses transaction monitoring and risk assessments to ensure that any illegal funds are tracked, frozen, recovered and/or returned to their rightful owner.”

Meanwhile, Ziya Sadr, an Iranian Bitcoin advocate, was recently arrested by the nation’s security forces, Blockchain.News reported.


Sadr’s arrest came amid widespread anti-government protests following the killing of a 22-year-old Iranian woman Mahsa Amini who died in police custody. Iranian authorities arrested at least 35 journalists in connection with the widespread demonstrations.

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Iranian Bitcoin Advocate Arrested by Local Security Forces

Ziya Sadr, an Iranian Bitcoin advocate, has been arrested by Iranian security forces. Multiple sources disclosed the matter, which was reported on Sunday.

According to sources, the arrest occurred on the streets of Tehran on September 19, and so far, Sadr has not been released.

Sadr’s arrest came amid widespread anti-government protests following the killing of a 22-year-old Iranian woman Mahsa Amini who died in police custody. Iranian authorities arrested at least 35 journalists in connection with the widespread demonstrations.

While Sadr is currently being held in Fashafouyeh Prison and remains in contact with his family and close friends, the reason for his arrest has not been tabled.

Sources said Sadr was not participating in a protest at the time of his arrest. He was set to be released on bail Sunday, but mass arrests from the protests have caused bail requests across the country to be delayed.

Sadr is just one of several Iranian residents and activists detained by the government in the weeks following the protests. It is unknown if the Iranian government’s interest in Sadr is associated with his Bitcoin advocacy.

Sadr is a popular Bitcoin educator and Youtuber and an advocate for the technology. He has been translating Bitcoin content into Farsi and promoting privacy-focused ways to use Bitcoin for personal transactions.

Last year, Ziya Sadr, a Tehran-based Bitcoin expert, disclosed the role that Bitcoin plays for Iran’s economy amid sanctions levelled against the country. For Iran, anonymous transactions made in cryptocurrencies allow local users and firms to bypass economic sanctions that have crippled the economy.

Sadr said: “Iranians understand the value of such a borderless network much more than others because we can’t access any kind of global payment networks. Bitcoin shines here.”

Since former President Donald Trump unilaterally withdrew from Tehran’s nuclear accord with world powers in 2018 and re-imposed sanctions on Iran, crypto has surged in popularity in the Islamic nation.

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Russian Finance Ministry on Track to Legalize Crypto for Cross-Border Payments

The current economic landscape in Russia is forcing both the Central Bank and the Ministry of Finance to rethink their approaches to cryptocurrencies. 


According to the State-backed TASS News Agency, Deputy Finance Minister,Alexei Moiseev said athatthe Central Bank and the Ministry thave reached an agreement that the use of cryptocurrencies for cross-border payments can no longer be undermined.

“As for the regulation of the cryptocurrency market, the difference in approaches has remained. But I can say that the Central Bank has also rethought [the approach], taking into account the fact that the situation has changed, and we are rethinking it. Because the infrastructure that we plan to create is too rigid for the use of cryptocurrencies in cross-border settlements, which, of course, we must, first of all, legalize somehow. On the one hand, give people the opportunity to do it. On the other hand, put it under control so that there is no laundering, paying for drugs, and so on,” Moiseev said.

Since Russia’s invasion of Ukraine, the former country has been battling a series of sanctions that have crippled its global financial capabilities. In light of these, Russian Prime Minister Mikhail Mishustin hinted at the possibility of using Bitcoin for cross-border transactions.

With Moiseev maintaining a similar stance, it seems obvious that the official legalization of Bitcoin, which was once under the consideration of being banned earlier this year, is just a matter of time. 

According to Moiseev, the move to support crypto is to have the opportunity that will aid easy monitoring as crypto native users find a way to either HODL or trade crypto either in or offshore.

“Now people open crypto wallets outside the Russian Federation. It is necessary that this can be done in Russia, that this is done by entities supervised by the Central Bank, which are required to comply with the requirements of anti-money laundering legislation, and first of all, of course, to know their client,” Moiseev said.

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Kraken Under Probe for Allegedly Violating US Sanctions on Iran

Cryptocurrency exchange Kraken is under federal investigation for potential violation of U.S. sanctions by allowing users in Iran and elsewhere to purchase and sell digital tokens, the New York Times reported citing sources familiar with the matter.

Five people with knowledge of the matter or exchange affiliation told the New York Times that Kraken is suspected of allowing customers in Iran and other sanctioned nations to use its exchange despite public calls prohibiting companies from doing so. The report stated that the sources requested for their identities to remain anonymous due to fear of retaliation.

The United States has upheld economic sanctions against Iran since 1979, and this means businesses based in the U.S. cannot do business with Iran or buy/sell goods to anyone in the nation.

According to the report, the U.S. Treasury Department’s Office of Foreign Assets Control has been investigating Kraken since 2019 and is expected to impose a fine on the exchange. However, the regulator has not indicated a timeline for the enforcement action.

Kraken Chief Legal Officer Marco Santori talked about the development and said the exchange would not comment “on specific discussions with regulators.” The executive further stated: “Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues”.

Several crypto platforms have proactively blocked platform access to users in Iran, and North Korea, among many others, in the face of a growing debate concerning international sanctions.

In March, the world’s largest NFT marketplace, OpenSea, blocked Iranian users from its platform when it enforced U.S. sanctions against Iran. In November last year, Ethereum software powerhouse ConsenSys blocked Iranian students from accessing its online programming course.

Enforcement Actions on Crypto

In the past, the US Treasury has charged several crypto firms for their alleged role in facilitating transactions violating federal sanctions. In December 2020, the Treasury imposed a fine of $99,000 on digital asset platform BitGo for violations of multiple sanctions programs. In February last year, the Treasury reached a $507,375 settlement with digital currency platform BitPay for alleged sanctions violations.

Kraken was also previously identified as one of a few crypto exchanges avoiding an outright ban of Russian accounts. Kraken’s CEO and co-founder, Jesse Powell, was recently put in the spotlight over his willingness to challenge regulations he considers as unfair, including international sanctions.

In March, Powell stated that his exchange was in compliance with the legal sanctions’ requirements but admitted that indiscriminate bans were unfair to average Russians, who might not support the country’s invasion of Ukraine.

In May last year, The IRS, whose parent organization is the US Treasury, ordered Kraken through court intervention to disclose identities of users who have been transacting in cryptocurrency on the exchange.

While in September last year, the U.S. Commodity Futures Trading Commission (CFTC) charged Kraken with a penalty worth $1.25 million for listing illegal off-exchange digital asset trading and failing to register as required by the law.

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Iranians Permitted to Trade on Binance, Despite US Imposes Sanctions: Reuters

A recent report from Reuters is yet again indicting Binance, the world’s largest cryptocurrency trading platform.


The report said the exchange permitted Iranian users to trade on its platform after the United States reimposed sanctions on the country back in 2018. 

According to the authors of the report, as many as 7 Iranians have confirmed that they maintained the use of the Binance platform from the time of the sanction back in August-November 2018 until September last year. Many of those who spoke to Reuters acknowledge the ease of use of the Binance platform which further offers very robust liquidity for a wide range of crypto assets.

Back in 2015, Iran inked a nuclear pact with world dealers making the US and other Western allies taper down some of their sanctions on the country at the time. The US reimposed the sanctions when the withdrawal of the US by former President Donald Trump from the Iranian peace deal. The setback of these sanctions fueled a massive decline in the Iranian economy, and an attractive basis for traders to rely on cryptocurrencies, through the Binance exchange.

Access to the Binance platform by the Iranian traders was cut off around last year September. However, the trading platform according to lawyers who spoke to Reuters stands a risk of being investigated by the US government. Although there is a point of whether the usage of the exchange was primarily focused on users using the trading platform to circumvent the sanctions, a trend that can tell if Binance will go scot-free.

Binance is always in the cross-hairs with the media when it comes to its operational ethics. Reuters has been particularly interested in Binance, as the renowned media outfit said back in June, this year that Binance was used as a conduit for money laundering and has facilitated as much as $2.4 billion in transactions.

Binance has denied these claims as well as other claims flying around with a confirmation that the exchange is renewing its approaches to maintain a healthy relationship with regulators. This is seen in the series of approvals to operate in key economies the firm has received, the latest of which is Spain.

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Iran to Introduce Additional Penalties for Illegal Crypto Mining

Iranian authorities are tightening their grip on illegal crypto mining in the country in response to the failing power challenges that the nation is facing.

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As reported by the Tehran Times, subsidised energy for crypto mining is now prohibited, and the Iranian government will pass new regulations to increase the penalties for illegal cryptocurrency mining using subsidised electricity.

The Distribution and Transmission Company of Iran, also called Tanavir, revealed through its representative Mohammad Khodadadi Bohlouli that the new rules will see offenders pay more fines moving forward. Khodadadi also noted that frequent offenders would likely be jailed for 3 to 5 years, a move that is set to serve as a deterrent to others.

“Any use of subsidised electricity, intended for households, industrial, agricultural and commercial subscribers, for mining cryptocurrency is prohibited,” Khodadadi said.

Iran is a known hub for crypto mining in the Middle Eastern region as the country enjoys a cheaper cost of electricity which attract a lot of miners. The sovereign nation designated crypto mining as an industrial activity, and despite the cheap electricity source, miners were placed on a different payment tariff from what commercial subscribers pay.

The new regulations are being sponsored as the interruption to the national grid is increasing per crypto miners connecting to commercial energy sources. In times past, Iran has been overburdened by miners as those making their exodus from China after the government banned Proof-of-Work (PoW) mining activities.

A few years back, the Iranian government showed how bullish it is on Bitcoin mining by approving as many as 1,000 licenses to companies that want to mine cryptocurrencies

While the country is posing to be welcoming to miners, its current power challenges make it make a definitive u-turn on some of its policies. While Iran is not banning mining outrightly, it is boosting its incentive to anyone who exposes the activities of illegal crypto miners in the nation.

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Digital Denarius: How a crypto revolution could have saved the Roman Empire

Two currency crises two thousand years apart. Modern-day Venezuela and the Roman Empire have more in common than you might think. Both know too well the dangers of soaring inflation and a collapse in investor confidence. But, only one has crypto on its side.

Venezuela’s official currency, the bolívar, has suffered from hyperinflation for half a decade due to repeated currency devaluations, minimum wage rises and significant public spending increases.

For a sustained period of several centuries, the Roman Empire enjoyed the enormous trade and commercial benefits associated with the world’s first fiat currency, as explored in my book Pugnare: Economic success and failure. The Roman currency was comprised of three coins: gold (Aureus), silver (Denarius) and copper or brass coins (Sestertius and Dupondius). Crucially, and despite fluctuations in the value of the underlying metal, the exchange rate between them was fixed by imperial decree.

This seemingly simple financial innovation brought with it untold wealth and commercial opportunity to the citizens of the Roman Empire, leading to the transition of Ancient Rome from an empire dependent largely on the spoils of war and imperial conquest to one founded on trade, commerce and free enterprise.

Just as with modern currencies, it was underpinned by a sophisticated banking system, which allowed goods to be bought and sold without the physical transfer of tonnes of precious metal. Most of their money was also like ours: created by banks out of thin air when they made loans. Just like modern economies, the majority of Rome’s money supply was held in bank deposits rather than cash in circulation. Though modern-day electronic transactions are faster, whether you use a graphics card or a horse and cart, the process is much the same.

Much like modern-day Venezuela, irresponsible public spending and currency debasement in the empire led to soaring inflation, a collapse in investor confidence and an abandonment of the consumer trust that underpinned the exchange rate innovation. But, if the Romans, paralleling the citizens of Venezuela today, traded in their Aureus for Ether (ETH) or if the government had set up a “digital denarius,” could the empire have survived?

Related: Gold, Bitcoin or DeFi: How can investors hedge against inflation?

Centuries apart, Rome and Caracas face the same menace: Hyperinflation

From the time of Emperor Philip the Arab (244 AD to 249 AD), the system of fixed exchange broke down. Every day, commercial activity became more difficult because of the variable rate of exchange. The equivalent effect would be if ten one-dollar bills were worth a ten-dollar bill one day then a five-dollar bill the next. Citizens no longer knew the value of their money. Economic activity declined.

This was a dramatic fall from grace for the world’s first government-controlled currency, which had been in use to pay for goods from Britannia to Judaea to Africa Proconsularis.

Unlike their Roman forebears, digital currencies have offered the citizens of Venezuela an innovative solution. They can circumvent the bolívar by adopting cryptocurrencies such as Bitcoin (BTC), Ether, Dash (DASH) and EOS (EOS), to the extent that the government introduced its own, the petro, in 2018. Iran is hoping to use the profits from a booming cryptocurrency mining sector to bolster its economy while still under siege from United States sanctions.

Related: US sanctions strategy and crypto: The cracks are showing in Iran

Turning to cryptocurrency was, despite the many technological and societal advancements they made, not an option available to the Romans. Instead, the Roman currency collapse led to a decline in economic activity, delivering economic destitution to once prosperous regions and triggering the start of a long and slow economic decline from which it would never truly recover.

Romans could have made a mint from crypto

Cryptocurrency would also have relieved the Romans of having to maintain a mint as well. It eventually became more and more difficult for the Romans to source the gold and silver to make new coins, so the government cheated by increasing the amount of base metal. This led to inflation which eventually made people lose trust in the money they held.

The breakdown in trust was worsened by a civil war in 193 AD that led to key currency reforms which had centralized control of the currency being abandoned. Once that control was lost, manufacturing and trade went into decline.

Like Venezuela, soaring inflation, a loss of confidence in government and civil unrest led to a collapse in the banking system and, finally, full-scale economic collapse. But, unlike the Romans, the decline of centralized currency offers a possible route out of economic decline for Venezuela, not the slow nail in the coffin it was for the empire.

Cryptocurrency is used by Venezuelans for everything from hotel bookings to pizza deliveries. While President Maduro’s government released the Petro, crypto has also been used against them. Maduro’s rival, National Assembly President Juan Guaidó, has used the stablecoin USD Coin (USDC) to circumvent Venezuela’s banks and send humanitarian aid to healthcare workers.

Power over the empire’s monetary supply was often contested between rival factions. For example, during the civil war of 193 AD, a new mint was opened in what is now Turkey and used by rival claimants to the imperial throne, Niger and Septimius Severus. In contrast, Emperor Vespasian was able to maintain a period of peace and stability between AD 69 and 79, partly because he recognized that he must control the money supply, especially the mints.

Roman cryptocurrencies could have survived to modern times

Governments in Venezuela, Iran and elsewhere today looking at adopting cryptocurrencies as official currencies should pay attention to the Roman example. It shows how badly things can go wrong if the money supply is controlled by different even rival organizations.

Perhaps if the Romans had not been reliant on physical currency but had instead had access to crypto, maybe it would not have been destabilized by economic collapse and in-fighting.

If so, maybe today the people of Venezuela would not be using Bitcoin or Ether, but instead a digital currency inherited from the time of Nero and Vespasian.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

George Maher is an academic and author. His latest book Pugnare: Economic Success and Failure, explores the rise and fall of the Roman empire from an economic perspective. It has been listed in both the Financial Times and Money Week. George holds a PhD in the economy of the Roman Empire from King’s College London and both a first-class honors BA and MA with distinction in Classics from Birkbeck University of London. He is a fellow of the Institute and faculty of Actuaries and holds a first-class honors degree in Special Honours Mathematics from Trinity College Dublin.