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Iran and Russia want to issue new stablecoin backed by gold

January 17, 2023No Comments

The Central Bank of Iran is reportedly cooperating with the Russian government to jointly issue a new gold-backed cryptocurrency.

According to According to the Russian news agency Vedomosti, Iran is working with Russia to create a โ€œPersian Gulf region tokenโ€ that would serve as a method of payment in foreign trade.

The token is projected to be issued in the form of a gold-backed stablecoin, according to Alexander Brazhnikov, executive director of the Russian Blockchain and Crypto Industry Association.

The stablecoin is intended to allow cross-border transactions instead of fiat currencies like the US dollar, Russian ruble, or Iranian rial. The report notes that the potential cryptocurrency would operate in a special economic zone in Astrakhan, where Russia began accepting Iranian cargo shipments.

Russian lawmaker Anton Tkachev, a member of the Committee on Information Policy, Information Technology and Communications, stressed that a joint stablecoin project would only be possible once the digital asset market is fully regulated in Russia. After multiple delays, the lower house of the Russian parliament once again fiance to start regulating crypto transactions in 2023.

Iran and Russia are among the countries that banned its residents from using cryptocurrencies as Bitcoin (BTC) and stablecoins like Tether (USDT) for payments. At the same time, Iran and Russia have been actively working to adopt cryptocurrencies as a foreign trade tool.

Related: Russia to start work on CBDC settlement system while sanctions last

In August 2022, Iran's Ministry of Industry, Mines and Trade approved the use of cryptocurrencies for imports to the country amid ongoing international trade sanctions. The local government said the new measures would help Iran ease global trade sanctions. iran later placed its first international import order using $10 million worth of crypto.

The Bank of Russia, historically opposed to the use of cryptocurrencies as a payment method, agreed to allow cryptography in foreign trade mitigate the impact of international sanctions. However, the regulator has never clarified which cryptocurrencies would be used for such transactions.