By Michael Scott
The Central Bank of Iran and Russia have joined hands to develop a new stablecoin that will facilitate International Trade within the Persian Gulf region. The gold-backed stablecoin will replace the existing fiat currencies used in cross-border payment.
Iran and Russia Expand to Cryptocurrency
A report captured by the Russian news site Vedomosti confirms that Russia and Iran are working towards strengthening their economic ties by introducing a new stablecoin. According to the report, the US Dollar, Russian Ruble and Iranian rials will seize to be used in cross-border transactions once the new digital currency is released.
The regulators will introduce the Persian Gulf crypto token at the Astrakhan Special Economic Zone (SEZ). Presently, Russia has an open market for Iranian cargo shipment at Astrakhan.
In the report, Alexander Brazhnikov, the top executive of the Russian Association of Crypto Industry and Blockchain (RACIB), reaffirmed that the token would be issued as a gold-backed stablecoin.
Elsewhere, a Russian pro-crypto lawyer Anton Tkachev argued that the proposed stablecoin deal would come to fruition when the Russian crypto space is well regulated. Tkachev’s remarks follow the lower house of the Russian parliament’s plans to regulate crypto assets this year.
Crypto Activities in the Persian Gulf
Last year the attempt to regulate cross-border transactions forced the Russian and Iranian regulators to ban the use of the largest crypto asset, Bitcoin (BTC) and Tether (USDT), as a payment option. On the other hand, Russia and Iran have been pushing through implementing crypto assets in foreign trade.
Reza Fatemi Amin, the Minister of Trade, Mines and Industry in Iran, waved a green light to using crypto assets in imports related transactions last August. Amin’s crypto move created mixed feelings among the Iran Import Association (IIA). They urged the government to develop clear regulatory measures citing the unprecedented Western Economic Sanctions.
As a result, by the end of September 2022, Iran had placed the first-ever import order that translated to $10M worth of cryptos used to acquire vehicles.
Correspondingly, the Central Bank of Russia Federation (CBRF) approved using cryptocurrency in international trade in September 2022.
Following the harsh policies and conditions developed to mitigate the prolonged Russia-Ukraine war, the country vehemently opposed using crypto payment. But it remains unclear which crypto asset the regulators advocate for as a payment method.