As digital currencies continue to reshape the global financial landscape, two major developments show the growing momentum behind innovation and regulation in the space. Iran is preparing to launch its central bank digital currency (CBDC), the digital rial, as part of efforts to modernize its financial infrastructure and navigate international sanctions. Meanwhile, in Europe, Schuman Financial has unveiled EURØP, a MiCA-compliant euro-pegged stablecoin, signaling a new era of regulated digital assets in the European market.
Iran Set to Launch Central Bank Digital Currency Amidst Sanctions and Innovation Push
Iran is poised to introduce its own central bank digital currency (CBDC) as part of its strategy to modernize its financial system and counter the challenges posed by international sanctions. Mohammad Reza Farzin, the governor of the Central Bank of Iran (CBI), made the announcement on Nov. 25 at the Modern Banking and Payment Systems Conference in Tehran.
The upcoming CBDC, known as the digital rial, is a product of years of development, having been initiated in 2018. Speaking at the conference, Farzin emphasized the critical role central banks play globally in adopting advanced banking systems. He stated:
“Developing innovative banking systems is a central bank’s responsibility worldwide, and we are determined to fulfill this duty in Iran.”
Iran’s CBDC aims to bring the country’s financial system in line with contemporary practices, ensuring its relevance in a rapidly evolving global landscape. The digital rial is built using open-source Hyperledger Fabric technology, which offers transparency and adaptability. By mid-2023, the CBDC had completed its "pre-pilot" stage of research with active participation from prominent Iranian banks, signaling significant progress.
A notable milestone in the digital rial's development was the retail CBDC pilot project launched in June 2023 on Kish Island, an Iranian free trade zone. Known for hosting millions of tourists annually, Kish Island served as an ideal testing ground for the new digital currency.
The pilot project focused on domestic transactions and was non-intermediated, meaning it facilitated direct interactions between the central bank and users without the involvement of commercial banks.
Farzin addressed the persistent challenges posed by international sanctions, particularly those led by the United States, which have hindered Iran’s access to the global financial system. Despite these obstacles, Iran has made notable progress in creating alternatives to bypass sanctions.
One significant development is the integration of the Russian MIR and Iranian ACU payment systems, which took place in October. Farzin highlighted the strategic shift away from the SWIFT international payment system, stating:
“We’ve replaced SWIFT with this platform and strengthened our ties with BRICS, which is shaping global trade with a strategic plan through 2025.”
This collaboration aligns with Iran's broader efforts to align with BRICS (Brazil, Russia, India, China, and South Africa) economies, which are collectively working towards reshaping global trade dynamics. The Iranian Shetab payment system, praised for its efficiency with transaction processing times of under two seconds, is also in the early stages of connecting with Russia’s MIR system, further cementing financial ties between the two nations.
Leveraging Blockchain and Digital Assets
Iran’s exploration of blockchain and digital assets extends beyond its CBDC initiative. The country has previously experimented with cryptocurrency for international trade to circumvent sanctions. However, such initiatives have faced challenges, as cryptocurrency exchanges risk penalties for engaging with Iran under US sanctions. Notably, Iran and Russia have also explored a gold-backed stablecoin for cross-border payments.
Iran’s digital rial and fintech innovations represent a significant shift in its economic strategy, aiming to modernize its banking system while mitigating the impact of sanctions. By leveraging blockchain technology and forging strategic alliances, Iran is positioning itself to maintain relevance in an increasingly digital global economy.
As the digital rial progresses from pilot stages to full-scale implementation, its success could set a precedent for other nations facing similar challenges.
Schuman Financial Launches MiCA-Compliant Euro-Backed Stablecoin, EURØP, Ahead of Regulatory Deadline
In a related development, Schuman Financial, a newly founded cryptocurrency firm led by former Binance executives, has announced the launch of its euro-pegged stablecoin, EURØP.
Schuman Financial emerged from stealth mode following a successful €7 million ($7.36 million) seed funding round led by Web3 venture capital firm RockawayX in September. Other notable investors include Lightspeed Faction, Kraken Ventures, Nexo Ventures, GnosisVC, Delta Blockchain Fund, Renaissance Ambition AG, Bankless Ventures, and others. The firm’s co-founder, Martin Bruncko, previously served as Binance’s executive vice president for Europe and is now leveraging his experience to introduce a stablecoin that meets MiCA’s stringent requirements.
EURØP is a euro-denominated stablecoin pegged 1:1 to the euro, offering global users a secure and regulated digital payment alternative. It is fully backed by cash and cash equivalents, ensuring stability and compliance with the MiCA framework. Schuman Financial plans to integrate EURØP into a variety of use cases, including digital payments, on-chain foreign exchange (forex) trading, and tokenized real-world assets, aiming to bridge traditional finance and decentralized finance (DeFi).
The stablecoin is initially launching on the Ethereum and Polygon networks, with plans to expand to other blockchain platforms and DeFi ecosystems in the coming months. A spokesperson for Schuman Financial revealed that EURØP is expected to go live within the next two weeks and will be listed on major European centralized cryptocurrency exchanges.
To ensure compliance with MiCA, Schuman Financial’s subsidiary Salvus SAS acquired a stablecoin issuer license in France, approved by the French Prudential Supervision and Resolution Authority. This license enables Schuman Financial to issue e-money tokens legally across the European market, providing a solid regulatory foundation for EURØP.
With this license, Schuman Financial is creating a fully regulated stablecoin ecosystem that includes integration with the Single Euro Payments Area (SEPA) and banking partnerships with global institutions like Société Générale. This compliance-centric approach positions EURØP as a robust option for users seeking secure, euro-backed digital assets in a regulatory-compliant environment.
While EURØP targets global adoption, it will not be available in all markets. Schuman Financial has designated 107 countries as "high-risk" jurisdictions, citing guidance from bodies such as the Financial Action Task Force (FATF), the European Union, the United Nations, the Office of Foreign Assets Control (OFAC), and Transparency International.
Among the restricted nations are Iran, North Korea, Venezuela, and Russia, as well as some of the largest stablecoin markets, including Turkey. Turkey, in particular, had the highest stablecoin purchases relative to its gross domestic product earlier this year, highlighting the complex dynamics of global stablecoin demand. Other restricted nations include El Salvador, South Africa, and the United Arab Emirates.
MiCA, a groundbreaking regulatory framework for cryptocurrencies in Europe, is set to be fully enforced by the end of 2024. The regulation provides legal clarity for crypto-assets, including stablecoins, requiring them to meet stringent transparency, consumer protection, and reserve management criteria.
Schuman Financial’s proactive alignment with MiCA is part of a broader trend among crypto firms seeking to establish trust and credibility in regulated markets. EURØP’s compliance with MiCA ensures that it can operate legally across Europe, offering users a secure and reliable alternative to other stablecoins that may face regulatory challenges.
A Growing Ecosystem for Regulated Digital Assets
EURØP is more than just a stablecoin; it represents a step toward building a regulated ecosystem for digital assets in Europe. By integrating with SEPA and partnering with major banks, Schuman Financial is creating a seamless bridge between traditional and digital finance. The firm’s emphasis on compliance and transparency positions it to capture market share in an evolving regulatory environment.
The launch of EURØP comes at a pivotal moment as Europe moves toward implementing MiCA. By introducing a fully regulated euro-backed stablecoin, Schuman Financial is addressing the demand for secure, compliant digital payment solutions in a global market increasingly scrutinized by regulators.
EURØP’s success could pave the way for other firms to develop MiCA-compliant stablecoins, fostering innovation while maintaining regulatory standards. With its experienced leadership and robust funding, Schuman Financial is well-positioned to shape the future of stablecoin offerings in Europe and beyond.
As the stablecoin becomes available in the coming weeks, its adoption and integration into various financial systems will be closely watched, potentially setting a benchmark for compliance and innovation in the cryptocurrency industry.
