Iran planning to develop own cryptocurrency following Venezuela's foray into digital cash

Iran could follow the lead of Venezuela and develop its own cryptocurrency, a move that could bring in much-needed money for the sanctions-hit country. 

Cash-strapped Venezuela on Tuesday became the first country to launch its own version of bitcoin, a move President Nicolas Maduro celebrated as putting his country on the world's technological forefront.

In its first hours on the market, the so-called petro racked in $735 million worth in purchases, Mr Maduro said without providing details.

In Iran, Mohammad-Javad Azari Jahromi, minister of Iran's Ministry of Information and Communications Technology, tweeted that state-run Post Bank was working on developing a cryptocurrency.

"In a meeting with the board of directors of the post-bank on digital currency-based blocking chains, it set out the necessary measures for the pilot implementation of the country's first digital currency ... A pilot model for review and approval will be presented to the banking system of the country," he said.

The Central Bank of Iran said said it was cooperating with other institutions to control digital currencies in Iran, the Iran Front Pagereported. 

Mr Maduro late last year announced he was creating the digital currency to outmaneuver U.S. sanctions preventing cash-strapped Venezuela from issuing new debt. The government said it will release 100 million digital petro coins during the first year, with the initial 38.4 million expected to go on sale Tuesday at a value of $60 per token.

If all the initial coins offered for sale are grabbed by investors, it could potentially bring several billion dollars into a government mired by cash shortfalls and skyrocketing inflation. 

However, the US Treasury Department has warned U.S. citizens and companies that buying the petro would mean violating sanctions.

Despite a nuclear deal that eased sanctions on Iran, consumer prices are rising at a double-digit clip and Iran’s currency has lost about one-tenth of its value against the dollar since May, curtailing Iranians’ spending power for foreign products.

Launching its own cryptocurrency could provide a source of cash but experts have said the market is still too nascent to make a meaningful skirting of a US-led economic blockade possible.

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