The Islamic Republic of Iran has reportedly launched a gold-backed cryptocurrency called “PayMon” – the Persian word for covenant – in cooperation with four local banks and the Ghoghnoos Company, in a move made following international sanctions.

According to the Financial Tribune, the country has launched the gold-backed cryptocurrency in cooperation with the Parsian Bank, the Bank Pasargad, Bank Melli Iran, and Bank Mellat. An over-the-counter (OTC) cryptocurrency exchange called Iran Fara Bourse is also expected to adopt the cryptocurrency.

The news outlet quoted Valiollah Fatemi, director at Ghoghnoos, who revealed the PayMon was set to be used to tokenize the financial institutions’ assets and properties.

Gold the backbone

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Iran Unveils Gold-Backed Cryptocurrencyhttps://t.co/Vf8lLGmHgm — Bitcoin, Gold, Silver & Geopolitics (@Super_Crypto) February 2, 2019

According to Ghoghnoos, a total of one billion PayMon tokens are set to be issued initially. The move comes months after international sanctions started crippling the country’s economy by forcing payment networks such as that of SWIFT from offering services to its institutions.

This has stopped Iranian citizens from conducting business with the rest of the world, and saw the country’s government plan a rial-supported national cryptocurrency, that as reported was to go to commercial banks in a first phase. While little is known about the cryptocurrency, some believe it was developed for the Iranian central bank by Informatics Services Corporation (ISC).

In a second phase, the rial-backed cryptocurrency – which is set to only be issued by Iran’s central bank – would go to citizens in the country. The gold-backed crypto, PayMon, was also launched shortly after the central bank issued draft cryptocurrency regulations.

These reserved a ban that stopped local banks from dealing with cryptocurrencies, while easing some of the rules the country had on cryptocurrency ownership. While cryptos like bitcoin still can’t be used as a payment method in the country and there are limits to the amount people can hold, ICOs and cryptocurrency wallets are now allowed in the country.

Cryptocurrency mining has reportedly also been given the green light. Late last year, Iran’s Deputy for Management Development and Resources Alireza Daliri publicly signaled his government’s support to develop and use blockchain platforms, for both public and private uses.