Iran and Russia have joined forces to enter the market with a jointly issued stablecoin backed by gold. This development comes while the global geopolitical landscape is in flux.
Recently, the Russian Association for Crypto Industry and Blockchain executive director stated (1) that the Central Bank of Iran is mulling over the possibility of creating such a stablecoin alongside its equivalent in Russia.
A Stablecoin that is backed by gold
This stablecoin is referred to as a "token of the Persian Gulf region" by the Russian news source Vedomosti. It would be used as a payment mechanism in international trade.
The United States Dollar, the Iranian Rial, and the Russian Ruble are examples of fiat currencies that might be used for international transactions; however, the United States and the other country intend to utilize this stablecoin instead.
In addition, it has been reported that the particular stablecoin would be utilized in the operations of a special economic zone in Astrakhan. At this same location, Russia initially started accepting cargo shipments from Iran.
Anton Tkachev, a politician in Russia who is a committee member on Information Governance, stated that it would be impossible to launch a joint stablecoin initiative in the nation until the market for digital assets is fully regulated.
Politicians have repeatedly slowed down the process of regulating the cryptocurrency sector in Russia. Nevertheless, the lower house of the Russian parliament has reiterated its commitment to begin regulating crypto currency transactions in the year 2023. Anatoly Aksakov, Chairman of the State Duma Committee made the following statement:
"I can tell every one of you that we will most certainly have crypto as a legal commodity next year, and there will most certainly be laws... I can only state categorically that it is not acceptable as a method of payment in the Russian Federation for any transaction that takes place within the country."
Status of Regulations for Crypto Currencies in Russia and Iran
Iran and Russia have passed laws preventing their citizens from utilizing crypto currencies such as Bitcoin (BTC) and other US Dollar stablecoins such as Tether (USDT). These laws were passed in January 2018.
On the other hand, both nations are aggressively exploring the possibility of utilizing crypto currency to evade sanctions imposed and as a medium for conducting international trade.
The Iranian Ministry of Industry, Mines, and Trade blessed the utilization of digital assets for importation into the nation in August of 2022. Iran's regional administration noted that the new measures will assist the country in mitigating the effects of global trade restrictions.
But on the other side, the Russian Central Bank has always had an antagonistic stance toward using digital assets as a form of payment. However, to lessen the effects of the worldwide sanctions, they agreed to utilize crypto currency in international trade.
The significance of a gold backed currency has been recently demonstrated when Russia pegged its Rubble to Gold and as a result is able to withstand the massive sanctions imposed from the NATO nations for its War on Ukraine.