Central Bank of Iran and Russian Government To Issue Gold-Backed Cryptocurrency

Illustration of Russia and Iran cooperation for gold-backed cryptocurrencies. (photo: Doc. Pixabay)

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

According to Russian news agency Vedomosti, Iran is working with Russia to create a “Persian Gulf region token” that will serve as a payment method in foreign trade.

“The token is projected to be issued in the form of a gold-backed stablecoin,” said Alexander Brazhnikov, Executive Director of the Association of Russian Crypto and Blockchain Industries, quoted by Cointelegraph.

Stablecoins aim to enable cross-border transactions instead of fiat currencies such as United States dollars, Russian rubles or Iranian rials. The report notes that the potential cryptocurrency will operate in the special economic zone in Astrakhan, where Russia has started accepting shipments of Iranian cargo.

Russian MP Anton Tkachev, a member of the Committee on Information Policy, Information Technology and Communications, emphasized that a joint stablecoin project will only be possible after the digital asset market is fully regulated in Russia. After several delays, the lower house of the Russian parliament has once again vowed to start regulating crypto transactions in 2023.

Iran and Russia are some of the countries that have banned their residents from using cryptocurrencies like Bitcoin and stablecoins like Tether (USDT) for payments. At the same time, Iran and Russia have been working actively to adopt cryptocurrencies as a means of foreign trade.

In August 2022, Iran's Ministry of Industry, Mines and Commerce approved the use of cryptocurrencies for import into the country amid ongoing international trade sanctions.

Local authorities say the new steps will help Iran ease global trade sanctions. Iran then placed its first international import order using crypto worth USD 10 million (Rp 151 billion).

The Bank of Russia, historically opposed to using cryptocurrencies as a payment method, agreed to allow cryptocurrencies in foreign trade to mitigate the impact of international sanctions. Regulators have never clarified which cryptocurrency will be used for such transactions.