Iran launches state-backed security coin

03 Feb, 2019
by Arthur Sillers
Iran launches state-backed security coin

Iran, after weeks of inching towards the announcement, is launching a gold-backed stablecoin called the PayMon (which translates to ‘Covenant’ in Persian), ostensibly to skirt US led sanctions.

According to the Financial Tribune, the Middle Eastern nation is developing the cryptocurrency together with local fintech firm Kuknos. The decision comes less than a week after Al Jazeera reported that Iran had developed cryptocurrency regulations for its internal economy.

The cryptocurrency comes with a combination of a local exchange, as well as a partnership with four Iranian banks, Bank Mellat, Bank Melli Iran, Bank Pasargad, and Parsian Bank. The cryptocurrency is likely aimed at providing an alternative to the SWIFT international transfer platform, which is the means by which countries like the United States have exacted fiscal sanctions.

US Treasury financial crimes arm FinCEN has already warned Iran against ‘illicit’ uses of crypto, presumably meaning the use of digital currency to evade US economic sanctions. It is not clear how successful Iran will be in utilizing PayMon to evade the United States’ directives, possibly a repeat of the relative failure of Venezuela’s Petro cryptocurrency.

Nonetheless, Iran has reportedly been in talks with at least 8 foreign bodies to develop crypto trading relationships, most notably with Russia, who also faces US-backed SWIFT sanctions.

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