Iran and Russia are considering introducing a gold-backed digital currency for potential use in international agreements, according to recent reports. However, an official from the Russian government has noted that regulations for cryptocurrencies need to be set in place before any progress can be made.
Russian and Iranian Representatives Weigh In on the Possibility of Using a Gold-Backed Stablecoin for Foreign Trade
The possibility of creating a digital token for the purposes of facilitating trade between Iran and Russia has been discussed, according to reports. The executive director of the International Currency Association suggested that the currency could be accepted as payment in international agreements, telling the Vedomosti business daily:
The token is to be backed with gold. It would be a stablecoin.
Stablecoins are digital currencies whose values are often tied to fiat currencies issued by national governments or to precious metals. Russia has recently delayed the adoption of comprehensive regulations for Bitcoin and other similar transactions, with the Bank of Russia opposing the legalization of the currency within the country. Last year, there was a proposal to allow gold-linked stablecoins.
Cryptocurrencies Need to be Regulated Before Gold-Backed Currency Can be Issued, Says Russian MP
The largest digital currency backed by physical gold, PAX Gold (ranking 74th in terms of market capitalization, with a total value of $511 million), is an ERC20 token based on the Ethereum blockchain. The news of the negotiations between Iran and Russia was confirmed by Anton Tkachev, a member of the State Duma’s Committee on Information Policy, Information Technology, and Communications.
However, the MP noted that cryptocurrencies must first be regulated before the issuance of a gold-backed currency can be addressed at a state level. Iran and Russia have both sought cryptocurrencies as a way to circumvent economic and financial sanctions, with Iran placing its first official order for cryptocurrency imports in August. The two countries are also working together to develop central bank digital currencies (CBDCs) such as the digital ruble or the crypto rial.
What do you think? Will Iran and Russia eventually issue a gold-backed stablecoin? Share your thoughts in the comments below.
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