The Central Bank of Iran is in discussions with Russia to create a new stablecoin which will be reportedly backed with gold. Russia and Iran have been strategic allies who have collaborated in the past on certain things, such as selling missiles and war machines to each other.
This news was first reported by Vedomosti, a Russian media firm, which stated that the two countries would use the newly created cryptocurrency to make payments to each other. When the Russian crypto plans with Iran become a reality, each country will no longer use the dollar, Russian ruble, or the Iranian rial for trade.
Alexander Brazhnikov, executive director of RAKIB, the Russian cryptocurrency and blockchain association, said that the cryptocurrency would be in the form of a stablecoin. But it will be backed with gold.
Tether gold (XAUT), the first gold-backed stablecoin with a market cap of $471 million, and Paxos Gold (PAXG) are examples of gold-backed stablecoins. Anton Tkachev, a Duma Committee on Information Policy, Information Technology, and Communications member, confirmed that discussions are already ongoing between the two nations to find a soft landing spot for the deal.
More Crypto Regulations in Russia
However, Anton Tkachev mentioned that the crypto and digital currency industry has to be very regulated in Russia before concrete discussions about the stablecoin start.
The Digital Financial Assets law to regulate crypto and create a national crypto exchange now has a draft amendment created by the Russian Duma on November 23rd, 2022. Sergey Altukhov, a member of the Economic Policy Committee for United Russia, confirmed the new draft. He emphasized that the Russian government is no longer pretending that cryptocurrencies do not exist.
Instead, Russian crypto laws have to be made to regulate how the industry operates in the country. "It makes no sense to pretend that cryptocurrencies do not exist, but the problem is that it circulates in a large stream outside of government regulation. These are billions of rubles of lost budget revenues in the form of taxes," Sergey Altukhov added.
Central Bank of Russia's Strict Stance on Crypto
Apparently, the Central Bank of Russia and its lawmakers have to take their stand on the issue and regulate the crypto space before any joint crypto can be created between Iran and Russia. However, both countries are trying to be fast since each state has been facing sanctions since the Russia-Ukraine conflict.
On the 10th of November 2022, Russia’s Central Bank (CBR) Governor, Elvira Nabiullina, mentioned her strict stance on cryptocurrencies. She stated that despite Russia's Central Bank public consultations on stablecoins, the country still has strict legislation against digital currencies.
"Regarding crypto, we are in favor of the development of digital financial assets, and the digitalization of finance. But digital financial assets are not limited to crypto, to private cryptocurrencies. We have not changed our position that private cryptocurrencies - for which it is not clear who is responsible, or how responsible, which are opaque and carry high risks of volatility - should not be used in settlements," Elvira Nabiullina said.
Creating a gold-backed stablecoin isn't surprising to many, as the number of gold purchased in the country has increased sharply since the Russia-Ukraine conflict. According to a survey conducted by Russian banks, more than 50 metric tons of gold have been purchased by Russian citizens since the start of the conflict.