Iran is pressing the Shanghai Cooperation Organization to create a shared digital currency, a move aimed at reducing reliance on the U.S. dollar and strengthening financial ties across the bloc.
Iran’s Vision for a New Regional Finance System
At the recent SCO summit in Tianjin, Iranian President Masoud Pezeshkian introduced a plan for Special Accounts and Settlements. This framework encourages broader use of national currencies and sets the stage for shared digital infrastructure such as central bank digital currencies. It also promotes a multilateral currency swap fund designed to help member states manage sanctions and liquidity challenges.
Iran has pushed similar ideas before. Former First Vice President Mohammad-Reza Aref urged the SCO to create a joint cryptocurrency to build trust, improve transparency, and streamline transactions among participating nations. This latest proposal builds directly on those earlier calls.
Digital Rial and Regional Integration
Iran continues to advance its own digital currency strategy. The Central Bank of Iran plans to launch the Digital Rial to modernize domestic payments and support future partnerships with regional digital finance efforts. Iran’s ambassador to Russia also highlighted growing interest in a joint SCO bank, which central bank leaders have discussed as a tool for trade that avoids dollar-centric financial systems.
Why the Initiative Matters
A successful SCO digital currency could reshape regional finance in several important ways:
- It would offer new geopolitical leverage by lowering dependence on the U.S. dollar across a bloc that includes China, Russia, India, Pakistan, and Central Asian nations.
- It could strengthen economic resilience by providing a swap fund for countries hit by sanctions or currency shortages.
- It would accelerate digital currency innovation by creating one of the most ambitious multilateral CBDC projects attempted so far.
However, the road ahead remains complex. SCO countries operate under very different monetary frameworks, and designing a unified digital platform raises technical, regulatory, and cybersecurity concerns. Still, Iran views this effort as a crucial step toward escaping dollar-based financial pressure and expanding its role in regional economic strategy.
