Iran becomes latest rogue state to develop its own cryptocurrency

  • Iran's minister of information and communications technology tweeted Wednesday that state-run Post Bank is working on developing a cryptocurrency.
  • The Iran Front Page news site added that the Central Bank of Iran is cooperating with other institutions to control digital currencies in Iran.
  • Venezuela President Nicolas Maduro said late Tuesday that the country's oil-backed "petro" cryptocurrency has raised the equivalent of more than $735 million.

Iran is considering the development of its own cryptocurrency, following in the footsteps of Venezuela. Both countries are the focus of U.S. sanctions.

Mohammad-Javad Azari Jahromi, minister of Iran's Ministry of Information and Communications Technology, tweeted early Wednesday New York time that state-run Post Bank is working on developing a cryptocurrency.

"In a meeting with the board of directors of Post Bank on digital currencies based on the blockchain, I ... prescribed ... measures to implement the country's first cloud-based digital currency," Jahromi said, according to a rough Bing translation.

The Iran Front Page news site also reported the statement Wednesday and added that the Central Bank of Iran is cooperating with other institutions to control digital currencies in Iran.

Venezuela President Nicolas Maduro said late Tuesday that the country's oil-backed "petro" cryptocurrency has raised the equivalent of more than $735 million. The nation's official currency has lost much of its value amid recent political turmoil, prompting many locals to turn to digital currency bitcoin as a more stable store of value. But the government has arrested many who try to create their own holdings of bitcoin through the "mining" process.

In the last few months, reports have also linked North Korea to cryptocurrency mining efforts and other attempts to use the digital currencies as a way to evade sanctions.

The idea of a federal institution such as a central bank creating its own cryptocurrency has been discussed in different parts of the world for the last few years. While regulators have widely viewed bitcoin with a critical eye, China, Russia, Singapore and some other countries have been experimentingwith developing their own digital currencies.

Cryptocurrencies' underlying blockchain technology eliminates the need for a third party and allows for instant, irrevocable and secure transactions.

The Bank for International Settlements, a global financial watchdog for central banks, said in a September report that the institutions may one day need to issue their own cryptocurrencies since the technology addresses needs of consumer anonymity and transaction efficiency. A representative was unable to comment for this article.

However, in the U.S., new Federal Reserve Chairman Jerome Powell has said that he is "very cautious of the idea of a Fed digital currency."