No more Bitcoin. Russia and Iran are working on their own stablecoin to circumvent sanctions!
Although talks are still ongoing, both countries agree on the direction of further cooperation.
Russia has a very ambivalent attitude towards cryptocurrencies. On the one hand, the authorities willingly use digital assets to avoid sanctions and cross-border payments, on the other hand, they fight to prevent its citizens from making anonymous payments or diversifying assets. However, this does not prevent the oppressive regime from working on introducing a stablecoin backed by physical gold or other raw materials.
Russia plans to create its own stablecoin
After an official visit to Iran, Russian politician Anatoly Aksakov, chairman of the Duma's Financial Market Committee, stated that the Russian authorities are seriously considering introducing a gold-based stablecoin to be used in international settlements in the future and to diversify against the SWIFT system.
According to the Russian, published in the "Parliamentary Gazeta" (Parlamentskaya Gazeta), Iranian officials have also signaled interest in such an initiative.
– We discussed the issue of stablecoins and other digital assets that would be backed by raw materials. For example, I was talking about gold, specifically gold bars, but it could also be refineries or other things like that. It is important that these assets are issued strictly in relation to these reserves, Aksakov explained after his visit to Iran.
Due to the fact that Iran and Russia are linked by sanctions imposed by the West, these countries are increasingly looking for alternatives to the global financial system, which is dominated by the US, China and Europe.
Countries that are on the margins of the international community want to use modern technologies in a strategic partnership, which is to be based primarily on trade in raw materials.
– Such a stablecoin can be widely used as a means of payment for mutual settlements between Russia and Iran, as well as other countries willing to do so – Aksakov elaborated.
Stablecoin better than Iranian rial
As another argument for the creation of a common digital currency, Aksakov pointed out that Iran is incurring more and more debt to Russia in trade in raw materials, and its currency, the rial, is not sufficiently stable.
The Iranian rial has two exchange rates at the same time. Official, approved by the Central Bank of Iran, and market-based, which means that every time one of the parties gets into conflict, because Russia does not want to receive undervalued Iranian currency at the price set by the Central Bank of Iran, and Iran does not want to admit that for the community internationally, its currency means almost nothing.
The solution in this aspect is to establish a surety for the issued stablecoins in raw materials whose measurement units are objective for the whole world and are not subject to market fluctuations.
Information that Tehran and Moscow are in talks on a gold-backed digital currency emerged in early January, when the head of the Russian cryptocurrency industry association told the business daily Vedomosti that Iran's central bank was considering issuing its cryptocurrency in cooperation with Central Bank of the Russian Federation.
Russia still bans cryptocurrencies from Russian citizens
The Russian central bank has been known for years for its critical approach to this asset class, which makes it difficult for authorities to spy on its citizens.
Currently, the institution intends to use virtual currencies in international payments, and at the same time, in December 2022, it launched a pilot program with "interested" companies, which aims to test the effectiveness of this solution on a slightly smaller scale.
– We are now planning, as part of an experimental legal regime that we are preparing, to try to use cryptocurrency for international settlements. That is, for foreign economic activity,” said Olga Skorobogatova, vice-president of the Central Bank of the Russian Federation.
So far, the central bank of Russia has shown a hostile attitude towards cryptocurrency assets. This institution was opponent of the legalization of digital currencies, but with the advent of Western sanctions due to Russia's attack on Ukraine, the central bank softened its position.
In September last year, Deputy Finance Minister Alexei Moiseev revealed that the Russian department and the monetary policy regulator agreed that in the current conditions their country would not be able to function properly without cross-border settlements in cryptocurrencies.
The Central Bank of the Russian Federation recently supported the proposal to legalize the mining of virtual currencies in its country. While this institution expressed its favor on this issue, it noted that local miners should trade digital assets obtained in this way only using foreign exchanges and cannot sell cryptocurrencies to Russians.
