New gold-backed stablecoins are being proposed by Iran and Russia

A new gold-backed cryptocurrency is reportedly being developed by the Central Bank of Iran and the Russian government.

Vedomosti, a Russian news agency, reported on Jan. 15 that Iran and Russia are developing a “token of the Persian Gulf region” for foreign trade.

It is anticipated that the token will be issued as a stablecoin backed by gold, according to Alexander Brazhnikov, executive director of the Russian Association of Crypto Industry and Blockchain (RACIB).

The stablecoin aims to replace fiat currencies such as the US dollar, the Russian ruble, and the Iranian rial in cross-border transactions. According to the report, the potential cryptocurrency would operate in a special economic zone in Astrakhan, where Russia has begun to accept Iranian cargo shipments.

Russian lawmaker Anton Tkachev, a member of the Committee on Information Policy, Information Technology, and Communications, emphasized that a joint stablecoin project would be possible only after Russia’s digital asset market was fully regulated. After several delays, Russia’s lower house of parliament has promised to begin regulating cryptocurrency transactions in 2023.

Iran and Russia are among the countries that have outlawed the use of cryptocurrencies such as Bitcoin and stablecoins such as Tether (USDT) for payment. Simultaneously, both Iran and Russia have been actively working to adopt cryptocurrency as a tool for foreign trade.

Amid persistent international trade restrictions, Iran’s Ministry of Industry, Mines, and Trade approved using cryptocurrencies for imports in August 2022. The new measures, according to the local authorities, will assist Iran in lessening the effects of international trade restrictions. Iran then used $10 million worth of cryptocurrency to make its first-ever foreign import purchase.

Due to sanctions, the Bank of Russia, which has historically been opposed to the use of cryptocurrency as a payment method, agreed to allow cryptocurrency in foreign trade as well. However, the regulator has never specified which cryptocurrency would be used for such transactions.

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