Iran and Russia want to issue new gold-backed stablecoins

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

Iran is working with Russia to create a “Persian Gulf Region token” that will serve as a means of payment for foreign trade, Russian news agency Vedomosti reported on Jan. 15.

According to Alexander Brazhnikov, executive director of the Russian Crypto Industry and Blockchain Association (RACIB), the token will be issued in the form of a gold-backed stablecoin.

Stablecoins are intended to enable cross-border transactions as an alternative to fiat currencies such as US dollars, Russian rubles, and Iranian rials. A potential cryptocurrency would work in Astrakhan’s special economic zone, where Russia has begun accepting Iranian freight shipments, the report notes.

Russian parliamentarian 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 several delays, the lower house of the Russian parliament has again promised to start regulating crypto trading in 2023.

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

Related: As sanctions continue, Russia begins work on CBDC payment system

In August 2022, Iran’s Ministry of Industry, Mining and Trade approved the use of cryptocurrencies for imports into the country amid ongoing international trade sanctions. The local government said the new measures would help Iran ease global trade sanctions. Iran has since placed its first international import order with $10 million worth of cryptocurrency.

The Bank of Russia, which has historically opposed the idea of ​​using cryptocurrencies as a payment method, has agreed to allow cryptocurrencies in foreign trade due to sanctions. However, the regulator has not disclosed which cryptocurrencies will be used for such transactions.