The Central Bank of Iran (CBI) announced that a pilot version of its digital currency will be tested in markets.

CBI Vice Governor for IT Affairs Mehran Moharamian confirmed that the currency will be dubbed as the "encrypted riyal".

The Head of CBI’s Informatics Services Corporation Abutaleb Najafi was quoted as saying: “We carried out about two years of continuous work on the platform and on the infrastructure needed for CBI’s cryptocurrency and now its pilot version is ready,” reported Mehr.

According to Press TV, Iran's digital currency will be an alternative to physical cash, in a move that would encourage people to use digital payments in the Islamic Republic.

Najafi explained that the Central Bank will need at least one year to examine the different economic, social, and legal aspects of launching the digital currency.

Tehran's step comes amid a wide circulation of several cryptocurrencies in the online sphere such as Bitcoin, Ethereum, and Cardano.

Earlier this month, Iran's Ministry of Industry, Mine and Trade agreed with the Central Bank to adopt the use of digital currencies in foreign trade.

Last August, the Iranian Cabinet approved using digital currencies to import goods.

According to an official in the ministry, the step is expected to achieve a 10 percent growth in non-oil exports.