Iran and Russia Join Forces to Create a Gold-Backed Stablecoin for International Trade

Iran and Russia are reportedly partnering to launch a new cryptocurrency that would be backed by gold, known as the "token of the Persian Gulf region".

It will be used as a means of payment in international trade, and the stablecoin will be issued by the Central Bank of Iran in cooperation with the Russian government.

As a matter of fact, the launch of a stablecoin would facilitate cross-border transactions and be can used as an alternative to traditional fiat currencies such as the US dollar, Russian ruble, and Iranian rial.

The cryptocurrency would operate in a special economic zone in Astrakhan, where Russia has already begun accepting Iranian cargo shipments. However, the project is dependent on the Russian government's regulation of the digital asset market. The Russian lower house of parliament has stated that it will begin regulating crypto transactions in 2023.

It is important to note that both Iran and Russia have prohibited their citizens from using cryptocurrencies, like Bitcoin, and stablecoins such as Tether for transactions. Nevertheless, they are simultaneously exploring the use of cryptocurrency as a means of facilitating foreign trade.

In August 2022, Iran's Industry, Mines and Trade Ministry allowed the use of cryptocurrency for imports into the country as a way to cope with international trade sanctions.

The country's first international import order was placed using $10 million worth of cryptocurrency. Despite previous opposition, The Bank of Russia also agreed to allow the use of cryptocurrency in foreign trade to mitigate the impact of international sanctions. However, the regulator has not specified which specific cryptocurrencies would be used for these transactions.