Iran pushes to rein in digital assets with launch of ‘cryptoreal’
Iran has been home to a large number of BTC miners for the past two years and has made significant progress in adopting virtual currencies as a means of avoiding financial sanctions.
However, Iran is not keen on advocating widespread local use of virtual assets for payments. The Central Bank of Iran (CBI) has announced that it will begin the pilot launch of its central bank digital currency (CBDC), which it called “crypto rial”, to promote financial inclusion.
A key feature of the central bank’s CBDC design is its military-grade security feature, making it difficult for bad actors to steal from users. According to a local publication, the bank says that the digital version of the Iranian rial will take into account privacy concerns and potential challenges during the tests.
The banking regulator noted that it would adopt a phased approach in its CBDC development to reduce the chances of failure. Al Jazeera reported that Iran’s CBDC would leverage the Borna platform, an IBM open source platform for distributed ledger technology (DLT).
The CBDC adoption will also see banking institutions switch from traditional paper rials to electronic ones. Iran noted that the gradual rollout of the program would be participated by selected banks due to Borna being a permitted ledger.
Southeast Asia tightens the noose for regulators
In neighboring Southeast Asia, the terrain for digital assets has been bumpy in the past couple of months following the decision by regulators to crack down on errant firms. In particular, Indonesia is leading the way in the region, with the commodity regulator planning to issue sweeping reforms.
The country’s Commodities Futures Regulatory Agency revealed that in the coming months it may issue a rule requiring at least two-thirds of the directors of digital asset firms to be Indonesians. Commission chairman Didid Noordiatmoko rationalized the proposed decision as a move to stop directors “from fleeing the country if any problem arises”.
Problems in the sector have been frequent since March when digital asset prices fell due to unfavorable macroeconomic conditions. The effect was disastrous for the industry as several firms were forced to shut down to stay afloat, with the local stock exchange Zipmex also suffering the same fate.
The reaction from the Indonesian authorities was swift as they tried to prevent a repeat of the events. Jerry Sambuaga, deputy minister at Indonesia’s Ministry of Trade, noted that other agencies would adopt stricter rules for operators in the area, such as the $6.7 million minimum capital requirement for virtual currency firms.
Sambuaga disclosed that apart from a majority of board members being “residents of Indonesia”, operators may be required to use third-party custodian providers as an additional layer of security for investors’ funds.
In Thailand, earlier in September, the Securities and Exchange Commission revealed new measures to regulate the digital asset market through strict control over advertisements. According to the latest mandate, only digital asset advertisements based on facts will be allowed to be published.
Thai authorities emphasized that this will not only maintain transparency, but will ensure that potential investors are protected from the risks of entering the industry.
See: The future of banking, financial products and blockchain
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