Four Iranian banks (Parsian Bank, Bank Pasargad, Bank Melli Iran, and Bank Mellat) have reportedly collaborated with Kuknos (a blockchain startup firm) to launch a gold-backed cryptocurrency called “PayMon”.
Iranian Banks Launching PayMon
Reports say that in the first phase, these four Iranian banks will issue one billion
The gold-backed crypto came into existence almost seven months after it was first reported that Iran might be developing a national cryptocurrency for bypassing sanctions. PayMon cryptocurrency, launched by the four Iranian banks, will reportedly help in tokenizing Rial, the national fiat currency of Iran. This will, in turn, help in facilitating domestic as well as cross-border transactions.
Analysts believe that the stoppage of services by SWIFT to the Iranian financial institutions was the single most important international sanction that forced the Islamic country to come up with their own version of cryptocurrency. Reports say that this new cryptocurrency will help Iran come out of the crippling effects of the US sanctions.
The US-Iran Faceoff on Matters of Iranian Digital Currency
In January 2019, some US lawmakers introduced bills seeking sanctions against Iranian effort of creating its own sovereign cryptocurrency.
Wisconsin Representative Mike Gallagher introduced a bill named “Blocking Iran Illicit Finance Act”. It called for a thorough probe in the reported cryptocurrency efforts of Iran. Texas Republican Senator Ted Cruz submitted a corresponding bill. This bill called for imposing sanctions against those who knowingly provide support to Iran with funds, technology, and services for developing digital currency of Iran.
A draft report was issued by the Central Bank of Iran last week. This report essentially said that they may block unapproved crypto use as a mode of payment. However, Iran has also eased many erstwhile stringent rules on cryptos. In fact, the Islamic country has now allowed cryptocurrency wallets as well as Initial Coin Offerings (ICOs).
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