Russia and Iran – both targets of economic sanctions – are considering the possibility of launching a common stablecoin with a value pegged to the value of gold. The idea is that the “Persian Gulf region code” will be used as a method of payment in foreign trade agreements in place of US dollars, Russian rubles and Iranian rials.
Alexander Praznikov, director of the Russian Cryptocurrency and Blockchain Industry Association, confirmed this information to Russian news portal Vedomosti. So did Anton Tkachev, a member of the Committee on Information Policy and ICT in the State Duma (the lower house of the Russian Federal Assembly).
Tkachev confirmed the talks. However, he made it clear that this issue will only be actively discussed at the state level after cryptocurrencies are fully regulated in Russia. This is expected to happen later this year.
Currently, the Russian Central Bank does not support the use of cryptocurrencies such as Bitcoin or Ethereum as a method of payment anywhere in the country. But it does allow digital assets to be used for business, including international trade.
According to Praznikov, the gold-backed cryptocurrency will have application in the Astrakhan region, for example. It is a free trade area where Russia has started accepting Iranian goods.
Cryptocurrency in Iran and Russia
In Iran, you cannot use cryptocurrencies as a payment method either. However, in August 2022, the Iranian Ministry of Industry, Mines and Trade approved the use of cryptocurrencies for imports into the country amid international sanctions. According to the local government, the new measures help Iran ease global trade sanctions.
Also in August, Iran used cryptocurrency to circumvent global sanctions and imported 50 million Brazilian reais of goods using digital assets. However, it is not known what cryptocurrencies Iran used to pay for goods, nor what those goods were.
Since 2017, the Iranian government has been under sanctions from the West, especially the United States. As a result, the country cannot use dollars to buy goods or services in the market, as the US controls the currency and who can use it.
The same goes for Russia, which is suffering the most from global sanctions after it invaded Ukraine in February 2022. Since the sanctions intensified, Russia has come to see cryptocurrencies as a way to overcome them. In late 2022, for example, Sber, Russia’s largest bank, integrated the popular MetaMask crypto wallet into its own blockchain.
In addition, Sber announced the issuance of a series of digital assets (DFAs) whose value is weighted by the price of gold. The creation of these assets aims to increase the number of corporate clients of the bank, and to create a new alternative to de-dollarization that the country is facing as a result of the sanctions.