Four banks in the Islamic Republic of Iran have launched a gold-backed cryptocurrency called the Peyman.

The economy of Iran has suffered tremendously since the administration of Donald Trump put back into place economic sanctions. There has long been chatter that the Iranian government would create a national cryptocurrency, a crypto-rial, that would help circumvent such sanctions. That hasn’t happened yet, but four Iranian banks have partnered with the Ghoghnoos Company to create a gold-backed cryptocurrency to do the same thing.

Introducing the Peyman

The new cryptocurrency is called the Peyman, which means covenant in Persian. The new crypto will be based upon gold and be used to tokenize assets and the excess properties of banks. The partners in this venture are the Ghoghnoos Company and Bank Mellat, Parsian Bank, Bank Melli Iran, and Bank Pasargad.

This is an interesting development, and it is obvious that this crypto was created in order to deal with the U.S. sanctions. Part of said sanctions excludes the Islamic Republic of Iran from participating in the SWIFT network that is used by the global banking system. The Peyman appears to be a measure to circumvent this exclusion to some degree.

Iran has been working hard to counteract the sanctions. Just a few weeks ago, meetings between Iran and other nations were held to discuss using cryptocurrency as a means of trade to bypass the sanctions. Mohammad-Reza Modoudi, the acting head of the Trade Promotion Organization of Iran (TPO), said:

Starting a new chapter in its international monetary transactions to circumvent U.S.-led sanctions, Iran is in negotiating the use of cryptocurrency in its financial transactions with eight countries. Representatives from Switzerland, South Africa, France, England, Russia, Austria, Germany and Bosnia have visited Iran to hold related talks about the issue.

Iran Bullish on Cryptocurrency

The creation of the Peyman, discussions of using cryptocurrency for trade with other nations, and the ongoing speculation about a crypto-rial show that Iran is really serious about embracing crypto.

As part of this embracing of crypto, the Central Bank of Iran released an early draft of its crypto regulations. This “Version 0.0” recognizes and authorizes global cryptocurrencies. It also gives the thumbs-up to cryptocurrency mining, exchanges, crypto wallets, and ICOs.

There is, however, a huge downside to this proposed regulatory framework. The bank notes that “using global cryptocurrencies as methods of payment inside the country is prohibited.”

In addition, citizens would only be allowed to hold a certain amount of “global cryptocurrencies” in a manner similar to how they can only hold up to 10,000 euros.

It is interesting that many are hailing these developments as a positive move. However, the reality is that Iran is not embracing cryptocurrency to promote financial freedom for its citizens but to bolster their faltering economy. The country has an abysmal record of human rights, such as arresting young women for posting videos of themselves dancing.

What do you think about the Iranian banks creating the Peyman? Let us know in the comments below.

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