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The two countries shall use this stablecoin to facilitate cross-border transactions and foreign trade between the two.
Amid the changing global geopolitical scenario, Iran and Russia have come together to issue a joint gold-backed stablecoin in the market. The executive director of the Russian Association of Crypto Industry and Blockchain, recently said that the Central Bank of Iran is considering the creation of such a stablecoin with its Russian counterpart.
Russian news agency Vedomosti describes this stablecoin as a “token of the Persian Gulf region” and would serve as a payment method in foreign trade. Both countries plan to use this stablecoin to enable cross-border transactions instead of using fiat currencies such as the USD, the Iranian Ruial or the Russian Ruble.
Furthermore, reports suggest that the specific stablecoin will be used to operate in a special economic zone in Astrakhan. This is the same place where Russia started to accept Iranian cargo shipments.
Anton Tkachev, the Russian lawmaker and the member of the Committee on Information Policy noted that a joint stablecoin project would only be possible after the digital assets market is entirely regulated in the country.
There have been multiple delays by Russian lawmakers in regulating the crypto market. However, the Russian lower house of parliament has once again promised to start regulating crypto transactions in 2023. Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, said:
“I can assure everyone that we will definitely have crypto as a legal product next year, there will definitely be legislation … I can only say unequivocally that it cannot be used in the Russian Federation as a means of payment for internal settlements”.
Crypto Regulations in Russia and Iran
Both Iran and Russia have banned their local residents from using cryptocurrencies like Bitcoin (BTC) as well as other USD-backed stablecoins such as Tether (USDT). However, on the other hand, both the countries are actively looking to make use of crypto to bypass international sanctions and as a tool of foreign trade.
In August 2022, Iran’s Industry, Mines and Trade Ministry, had approved the use of digital assets for imports into the country. The local government noted that the new measures would help Iran mitigate global trade sanctions.
On the other hand, the Bank of Russia had historically opposed the use of digital assets as a payment method. However, they agreed to use crypto in foreign trade to mitigate the impact of global sanctions.