Iran's Government Is Using Crypto Startups as Part of Its Blockchain Embrace

Iran's central bank is working with a pair of blockchain startups that are developing what could be the groundwork for a new token ecosystem, CoinDesk has learned.

Many government banks around the world have launched isolated blockchain pilots.

The Central Bank of Iran unveiled plans for a more comprehensive cryptocurrency program at Tehran's Electronic Banking and Payments conference.

What's more, private banks in the country have stepped up to fund one of the startups in a move that could pave the way for the issuance of the first native Iranian cryptocurrency.

One of those initiatives is the Kuknos protocol, created by a new Tehran-based startup called Kuknos Company, which was funded with government approval by private banks and granted permission to issue a gold-backed token called Paymon.

A complementary infrastructure project called Borna is being developed in a private-public partnership and is funded directly by the Central Bank of Iran.

The first startup, Kuknos Company, was recently founded with just under 20 employees, according to Kuknos advisor Soheil Nikzad. The company is receiving funding from private Iranian banks like Bank Mellat, Bank Melli Iran, Bank Pasargad and Parsian Bank.

Although Nikzad said several local projects have reached out to Kuknos seeking guidance for prospective initial coin offerings, it appears that for the foreseeable future, Iranian banks will be the main issuers of approved cryptocurrencies.

"Kuknos is another banking consortium blockchain using Stellar architecture for tokenization of assets such as gold, real estate, fiat currencies and other assets," Emani said.

Global media sources have speculated about Iran seeking to leverage cryptocurrencies to bypass economic sanctions, which restrict U.S. banks and organizations from doing business with the Iranian finance sector.