Treasury Sanctions Network Involved In Iran's CBDC Program

This afternoon, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted individuals and entities involved in the government of Iran’s program to develop a  Central Bank Digital Currency (CBDC).

Specifically, OFAC sanctioned a procurement network responsible for facilitating the illegal export of goods and technology from over two dozen U.S. companies to end-users in Iran, including the Central Bank of Iran (CBI), which is designated for its role in providing financial support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah.

One of the entities sanctioned is Iran-based Informatics Services Corporation (ISC), a subsidiary of CBI and publicly recognized as the technology arm of CBI,which most recently developed the Central Bank Digital Currency (CBDC) platform for the Central Bank of Iran. 

According to the designation, UAE-based Advance Banking Solution Trading DMCC (ABS), a front company for ISC, acquired proprietary U.S. goods and technology from over two dozen U.S. companies, using false information, for onward transfer to CBI.

According to an April 2023 report from TRM Labs, the government of Iran has been exploring a CBDC for some time. In September 2022, the Iranian government initially announced the pilot launch of the “crypto-rial” which has been in development since 2018. In January 2023, the CBI stated that the crypto-rial was past its pilot stage and would be ready to be launched on February 7. The CBI announced in early March 2023 that the CBDC was entering its trial phase after successful completion of the pilot stage of testing. 

In addition to the “crypto-rial,” the governments of Iran and Russia have reportedly been working on a gold-backed stablecoin to be utilized for cross-border payments, which could be an attempt by the two governments to avoid the impact of continued U.S. and international sanctions.

TRM is closely monitoring today’s designations and Iran’s development of a CBDC.