Central Bank of Iran Trails Blockchain to Revamp Financial System

Central Bank of Iran Trails Blockchain to Revamp Financial System



Central Bank of Iran Trails Blockchain to Revamp Financial System

The Central Bank of the Islamic Republic of Iran aims for blockchain inclusion economy for the country’s financial system, as reported by news outlet AL-MONITOR.

According to the report, in the past year, the Central Bank, through its technology division the Informatics Services Corporation, in partnership with blockchain solutions firm Areatak, has been developing a nation-wide blockchain platform dubbed Borna. Built on the Hyperledger Fabric, the platform will onboard other banks and financial institutions to bring about seamless transactions and financial service operations.

The core principle embedded in the Borna platform is to enable the Central Bank to communicate seamlessly with other banks and financial institutions and implement directives through smart contract technology. More so, the platform is expected to reduce the effective cost of developing blockchain solutions by participating stakeholders.

The source citing the Borna whitepaper said the platform has two distinct layers. A noncompetitive layer handles know your customer (KYC) operations, token management, and online auditing services, while a competitive layer allows financial players to “offer an array of services” to include “accepting deposits, offering loans, commercial financing, and asset management”.

It appears Borna has a political incentive for developing the platform on the Hyperledger architecture, as it will enable them to connect with international allies in the future without being crippled by US sanctions.

Further, another major milestone for the Central Bank will be to issue a sovereign rial-backed cryptocurrency to facilitate transparency during local transactions. This cryptocurrency may as well be integrated to the Borna platform, the source indicated.

Earlier this year, the Central Bank of Iran released a draft on cryptocurrency regulations, thereby slightly lifting a blanket-ban it had previously placed on the emerging asset class – allowing for trading of the digital asset class but prohibiting its use as a medium of exchange within the walls of the Islamic country.

On the subject of blockchain development in Iran, there appears to be sufficient evidence the financial system is receptive of the blockchain industry and continues to drive initiatives towards an inclusive global blockchain economy. In February, Bitcoin News reported four Iranian banks working with blockchain startup Kuknos to develop a gold-backed cryptocurrency.

 

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Central Bank of Iran Trails Blockchain to Revamp Financial System



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