Tehran and Moscow are discussing the possible launch of a stable currency for international agreements, the Russian press has revealed. However, to mint the gold-backed currency, authorities would first have to regulate crypto assets, a lawmaker noted.
Russian and Iranian representatives discuss the use of a gold-backed stablecoin in foreign trade
The central bank of Iran is considering the possibility of creating, with the participation of Russia, a digital token to facilitate trade in the Persian region, according to a report citing the head of the crypto industry organization in the Russian Federation.
The currency could be accepted as a means of payment in international agreements, the executive director of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (Racib), Alexander Brazhnikov, told the Vedomosti business daily, detailing:
The token is supposed to be backed by gold, it would be a stablecoin.
Stablecoins are cryptocurrencies, the value of which is typically tied to state-issued fiat currencies or precious metals. While Russian authorities postponed the adoption of comprehensive regulations for bitcoin and the like, and the Bank of Russia opposed its legalization in the country, a proposal circulated last year to allow the use of gold-backed stablecoins.
Cryptocurrencies Should Be Regulated First, Says Russian MP
The largest digital currency backed by physical gold according to the issuer, PAX Gold is currently ranked 74th in terms of capitalization, with a market capitalization of over $511,000,000. It is an ERC20 token based on the Ethereum blockchain.
The news of the negotiations has been confirmed by Anton Tkachev, a member of the Committee on Information Policy, Information Technology and Communications of the State Duma, the lower house of the Russian parliament. However, he commented that the matter would be actively discussed at the state level only after cryptocurrencies are fully regulated.
Russia and Iran, both under Western economic and financial sanctions, have been seeking crypto assets as a means of circumventing the restrictions. In August, Iran placed its first official import order using cryptocurrency, while Russia is considering legalizing cross-border crypto payments. The two nations are also developing central bank digital currencies (CBDC), the digital ruble and the crypto rial.
Do you think Iran and Russia will eventually issue a gold-backed stablecoin? Share your thoughts on the subject in the comments section below.
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