Iran is set to launch a public pilot for its digital currency, the digital rial, on Kish Island. The Central Bank of Iran unveiled the pilot program, which will allow users on the island to make cashless transactions by scanning a barcode. This eliminates the need for physical currency or bank cards. The public rollout follows a successful pilot program launched in 2023. Iran is not the only country in Asia piloting a central bank digital currency (CBDC), as Israel recently launched its digital shekel test. China has also made significant progress in this area with its digital yuan, which has gained traction since its pilot in 2019. However, there are concerns that Iran’s CBDC could be used to evade US sanctions. In February 2024, the US imposed sanctions on the Informatics Services Corporation (ISC), a subsidiary of the Central Bank of Iran responsible for developing the digital rial CBDC. Iran’s membership in BRICS has led to collaboration with Russia on CBDC, which will be gold-backed for cross-border payments. These developments have raised fears of sanctions evasion when combined with Russia’s efforts.
