Iran Launches a Gold-Backed Cryptocurrency

The reason why we have Bitcoin is because of the 2008 crisis. Satoshi Nakamoto, the individual or the group behind Bitcoin designed a cryptocurrency that isn’t tied to any economy. More than a decade after Bitcoin was created, there are thousands of other cryptocurrencies out there. And now, even countries that are struggling with their economy have now relied on blockchain.

Iran is one of those countries. Since the trump administration backed out of the nuclear agreement, Iran has been facing tensions with the US. And now, Iran is looking to create a state-backed cryptocurrency. The goal of this cryptocurrency is to facilitate payment with other countries. ‘

Last year, Iran was kicked out of the SWIFT network. It has crippled the country’s ability to trade in an efficient manner. Russia along with other countries are working on an alternative which is the blockchain.

Iran’s Economic Problem

By taking a closer look at the current value of Iranian Rial, it is now equivalent to $0.000024. It means that you will need millions of rials just to buy a phone or any gadget for that matter.

But of course, the question is if it is going to work? This isn’t the first time that we have a country that resorted to blockchain hoping to solve economic problems. Venezuela has been dealing with hyperinflation. It is even projected that their inflation rate would reach one million percent. Under the Maduro administration, the government decided to have their cryptocurrency named Petro in order to continuously trade despite US sanctions.

However, the cryptocurrency was controversial. According to the Maduro administration, the Petro is backed by oil. However, critics were questioning that the oil to back the Petro can’t be seen anywhere. So far, Venezuela’s Petro adoption is being forced. The Petro has also been used to create a new currency called the Sovereign Bolivar.

Iran’s Gold-Backed Cryptocurrency?

As for Iran, they launched a cryptocurrency that is backed by gold. This cryptocurrency is known as Peyman. There are four partner banks that worked together with Ghoghnoos Company to make this a reality. For Valiolla Fatemi who works as Ghoghnoos director, “The token can function like a wallet and channel the excess assets into the economic cycle. We seek to extend the technology for accelerating the pace of bank transactions”.

For the initial stages, there will be one billion units of the cryptocurrency that will be made available. And also, in the near future, the cryptocurrency can be purchased on Irana Fara Bourse. Peyman has been launched after speculations that Iran is about to have a state-backed crypto called crypto-rial.

Timely Solution?

Is this a timely solution? Iran has been having a difficult time to transact with other countries as of the moment since they’ve been kicked off the SWIFT network. Could this be the best solution to Iran’s problem?

Iran recently announced that it is restricting the use of cryptocurrencies. Bitcoin and other top cryptocurrencies can’t be used for payment in the country. Is it going to limit the use of crypto in order to increase the adoption of Peyman?