This entry provides an historical evolution and current structure of the central banking system in Iran. The financial control mechanisms in Iran have their origins in monetary innovations during the Achaemenid Empire and the early financial role of temples. The advent of Islam in the region precipitated a fundamental shift in the financial intermediation system, precipitated by the prohibition of interest (riba). During the Safavid period, with the resurgence of trade, the practices executed through traditional financiers (sarrafs) assumed primacy. The advent of modern banking in Iran commenced with the establishment of foreign-owned banks in the mid-nineteenth century, followed by the inauguration of the first national banks such as Bank Sepah and Bank Melli in the early twentieth century. The nationalization of the authority to issue banknotes and the establishment of the Central Bank of Iran (Bank Markazi) in 1960 were significant steps toward consolidating national financial sovereignty and implementing development-oriented policies. The 1979 Islamic Revolution, however, marked a radical turning point in Iran’s banking history, resulting in the nationalization of all private and foreign banks and the mandatory adoption of interest-free (Islamic) principles for all banking activities in accordance with the constitution and the Interest-Free Banking Law (1983). This transformation necessitated the adoption of profit-loss sharing (Musharakah, Mudaraba), leasing (Ijarah), and other Sharia contracts as the basis for banking transactions, as well as a redefining of monetary policy instruments and objectives within this framework. Presently, the Iranian banking system functions within a distinctive structure that is founded on the adherence to Islamic principles, the realization of national development objectives, and the challenges posed by international economic sanctions.