Iranian Banks Launch Gold-Backed Cryptocurrency
Four Iranian banks have reportedly launched the first gold-backed cryptocurrency in the country.
The Financial Tribune has reported that Bank Mellat, Bank Pasargad, Bank Melli Iran, and Parsian Bank partnered a blockchain startup called Kuknos to launch the “PayMon” cryptocurrency.
According to the news report, the new token will be used to facilitate the tokenization of the participating banks’ assets and properties.
An initial one billion PayMon tokens will be released at launch and will be available for buyers at the country’s over-the-counter (OTC) cryptocurrency exchange called Iran Fara Bourse.
Iran’s plans for a national cryptocurrency went into “forward gear” in June last year after U.S. President Donald Trump announced new economic sanctions against the Islamic Republic.
The country’s leadership warmed up to the idea of a rial-backed national crypto stating that it would help Iran evade the full impact of the looming sanctions.
Recently, speculative reports suggested that Iran was about to unveil its state-backed digital currency at the Electronic Banking and Payment Systems conference held last week in Tehran.
Although such an announcement is yet to be made, reports also allege that Tehran is negotiating with several countries with the aim of convincing these countries to use cryptocurrencies for financial transactions involving Iran.
The countries are Germany, Switzerland, the U.K, France, South Africa, Russia, Austria, and Bosnia.
Despite these efforts, the Central Bank of Iran issued a report in which the top bank suggested it would block the use of crypto for payment as well as bar Iranians from holding large amounts of cryptocurrencies.
The government also reportedly warned citizens against the use of Telegram’s Gram Token, criminalizing it for what it called the potential to disrupt the country’s economy.
It is interesting that the launch of the gold-backed cryptocurrency comes less than two months after U.S. lawmakers introduced bills that sought to curtail Iran’s efforts at creating a sovereign cryptocurrency.
One of the bills seeking additional sanctions against Tehran is the Blocking Iran Illicit Finance Act. The House bill was introduced by Rep. Mike Gallagher of Wisconsin and wants further investigations into Iran’s efforts to develop a fiat-backed cryptocurrency.
Sen. Ted Cruz (R-Texas) introduced the corresponding bill in the Senate.
The bills also want the Senate or House of Representatives to enact into law proposals prohibiting the use of the Iranian digital currency in financial transactions.
The bills further call for sanctions against individuals established to have knowingly helped the country in the form of funding, services or “technological support” to facilitate the development of Iran’s digital currency.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.