Iran’s Central Bank Governor, Mohammad Reza Farzin, has announced plans to launch the country's first central bank digital currency (CBDC), dubbed the "digital rial," in a bid to modernize its banking system and resist international sanctions. Speaking at the Modern Banking and Payment Systems Conference in Tehran on November 25, Farzin emphasized the nation's strong digital infrastructure and its commitment to innovation.

The digital rial project, under development since 2018, leverages Hyperledger Fabric technology and has already completed a “pre-pilot” phase with major Iranian banks. A retail pilot was launched in June on Kish Island, a free trade zone attracting 12 million tourists annually. Currently focused on domestic use, the CBDC aims to keep Iran’s financial ecosystem competitive in a rapidly evolving global market.

Farzin stressed that creating advanced banking systems is a global central bank responsibility, stating, “We are determined to fulfill this duty in Iran.” The initiative reflects Iran’s efforts to adopt modern financial tools while circumventing sanctions that limit its access to international systems.

Iran is also pushing fintech solutions to bypass traditional financial barriers. In October, the integration of Russian MIR and Iranian ACU payment systems replaced SWIFT, strengthening ties with BRICS nations. Additionally, Iran’s Shetab payment system processes transactions in under two seconds, making it one of the most efficient in the region.

Beyond the digital rial, Iran and Russia are exploring gold-backed stablecoins and cryptocurrencies for cross-border trade. However, global sanctions continue to challenge these efforts, with crypto exchanges facing penalties for operating in violation of U.S. restrictions.

This CBDC launch marks Iran's latest move to adapt to financial challenges and foster resilience amid mounting economic pressures.