Amir Nazemi, head of the Information Technology Organization and deputy minister of communications, said at the Central Bank’s digital currency event, referring to the benefits of these digital currencies, that today these types of currencies are a requirement for increasing financial inclusion.
According to digital currency and to Quoted By way of payment, Amir Nazemi, head of the Information Technology Organization and Deputy Minister of Communications, was one of the speakers at the Central Bank Digital Currency Event, which spoke about the value added of the Central Bank Digital Currencies (CBDC) for online businesses. At the beginning of his speech, he mentioned the four stages of communication in the field of banking and information technology. According to him, the first stage was when accounting and banking systems preferred to use information technology tools instead of traditional tools, which has finally become the core of banking systems in today’s world.
He described the second stage as payment instruments and explained:
Payment instruments formed the link between the two. Formation of payment instruments from magnetic cards that we used to use in ATMs and card readers for many years, so that newer instruments such as payment software are examples of the connection between the field of banking and information technology in the second era.
According to Nazemi, in the third stage, when these tools were only in the field of payment, they spread to other areas as well. There are tools that we collectively refer to as fintech or financial technologies. Some of them are no longer necessarily payment areas. Such as the field of lending (LendTech) or the tools that lead to the management of wealth or assets, which is called wealth technology (Wealth Tech) or tools that are referred to in areas such as insurance or technologies in the field of insurance. This stage can be called the third stage that has formed the relationship between technology and banking.
Ardigital Central Bank is very different from digital currency
He considered the fourth stage to be the stage we are entering today. He explained:
At this stage, the concept of money becomes important, either as a means of exchange or as a commodity or asset that can itself be valued in itself. This is where we come across new concepts, one of which is cryptography. Many people are familiar with cryptocurrencies through cryptocurrencies such as bitcoin. Cryptocurrencies have come to life today and make a part of buying and selling.
After this explanation, Nazemi pointed to the value of the central bank’s digital currency and said:
In addition to these cryptocurrencies, we are faced with another concept called digital currencies of the central bank. CBDC is very different from cryptocurrencies. Many of the CBDCs we know and use by well-known central banks are not necessarily blockchain based. So when we talk about digital currencies, especially central bank digital currencies, it does not necessarily mean that they use blockchains or blockchains and may use other technologies.
“There are differences today between the Blockchain and a concept like distributed general offices, and these differences become significant when we talk about central bank digital currencies,” he said. In other words, the central bank converts the same money we use today into cash into a digital instrument, and this digital instrument may or may not be blockchain based.
An issue that is important for the regulator and should be mentioned in the field of digital currencies is that the field of digital currencies of the central bank is a requirement that must be addressed. He explained:
This requirement is important because technology, as it expands, provides new potential for financial institutions and policymakers that did not exist before. For example, if we talk about digital currencies today, it is also possible to identify the value chain produced in a country. It also provides the opportunity to get to know our customers. So not using digital currencies is a kind of deprivation of a society from a government, proper policy-making and even welfare facilities that increase the quality of life and also enhance the power of businesses.
The choice of social purpose affects the design of digital currency
He explained that if we accept that digital currencies are a requirement that we must move towards in the coming years, and of course very quickly, we need to make decisions beforehand.
Nazemi went on to point out one of the most important decisions in the field of digital currencies and said:
The differences and diversity of digital currencies in different countries are very diverse, and when we look at different examples, we find that each country designs its own central bank digital currencies for its specific purposes. In many countries these digital currencies may be designed for the business layer, while in another society they may be designed for the level of purchases and micropayments. Thus, countries today that have moved to digital currencies, such as China and Sweden, have completely different goals and are faced with the dilemma of for what social purpose they want to develop this tool. The type of social goal strongly influences the design of the digital currency on which we want to operate.
According to the head of the Information Technology Organization, the most important goals that can be set for digital currency in Iran are discussions on redistribution policies and fair opportunities for citizens. He explained:
If we want to deal with the issue of digital currencies with this view, transparency is usually important for us. This tool can be the most important tool to increase financial inclusion, which is considered an important policy in Iran.
Regarding the need for this policy to design the central bank’s digital currency, he said:
The most important reason for this necessity is the current situation of households and family deciles. We live in societies where large numbers of deciles are in a state of economic bankruptcy. In the sense that the expenses of that decile are more than their sources of income. In this situation, perhaps more than digital currencies to facilitate business layer processes, we need tools that can empower citizens and enable us to better implement our various redistribution policies. . Policies such as subsidy policies can be implemented more easily and purposefully in the digital currency space. Because it is traceable and that we target only certain areas to spend it.
“Governments can be improved and improved in the future through the same technological tools,” Nazemi said.
If we do not go for digital currencies, we take away the opportunity to have a better quality of life. Digital currencies are a must, and we have no choice but to plan for them. For planning, perhaps the central bank is not the only policy maker. Designing such a tool requires the help of other fields, especially social and technological fields, for a more desirable design of digital currency.
He concluded that digital currency is not just a banking issue, but a banking tool that can be used to its full potential by different areas with different purposes. The best way to predict the future is to build that future. If we want to have a better future, we must build it with the best tools. So we have no choice but to use tomorrow’s technologies so that we can have better goals and a better quality of life.