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Iran’s top banks launch blockchain platform to boost ailing banking system

Banking giants in Iran have established a digital tokenization platform to liquidize bad assets. If it can overcome the many challenges on the way, it could generate vital cash — and public trust.
Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. Picture is taken February 13, 2018. REUTERS/Dado Ruvic/Illustration - RC1993E31370

The biggest players in Iranian banking have joined forces in an effort to empower an ailing banking system that has long suffered from a slew of major issues — including a hefty credit crunch. There is no shortage of potential pitfalls and challenges, but the blockchain-enabled platform they have established — and its native gold-backed cryptocurrency — may prove a crucial source of cash and public trust in a not too distant future.

During the past year, the technology and payment system arms of four major Iranian banks — Parsian, Pasargad, Mellat and Melli —- in addition to Tosan, a leading provider of banking software solutions, have been developing Kuknos (“Phoenix”). Using distributed ledger technology, the blockchain platform’s ultimate goal is to make it possible for financial entities to issue digital tokens for a variety of assets and therefore increase financial inclusion. Its most immediate target, however, is to allow banks to tokenize and then liquidize their so-called “frozen” or non-productive assets.

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