Russia may issue a stablecoin backed by gold for use in international payments, a high-ranking member of the Russian parliament has admitted. The issue was discussed during a recent visit to Iran, where officials have expressed interest in such a concept.
Iran and Russia discuss stable coin settlement for bilateral trade settlement
The Russian Federation is considering the creation of a gold-backedstable cointhat could be employed for cross-border settlements, including with Iran, Anatoly Aksakov, chairman of the Financial Markets Committee in the lower house of the Russian parliament, told the Parlamentskaya Gazeta newspaper.
“We discussed the issue of stable coins, which are digital financial assets (DFA) backed by certain valuables. For example, I spoke about gold, gold bars, refineries can provide them, or centers where gold is stored, and DFA is issued against these reserves,” the MP explained after the visit of the Russian delegation to the Islamic Republic.
Such stable coins could be used as a means of payment, for example, in mutual settlements between Russia and Iran, Aksakov elaborated, also citing an Interfax news agency article. He added that the proposal has been received with interest from the Iranian side.
In addition, the high-ranking member of the State Duma noted that Iran is heavily indebted for goods supplied by Russia. At the same time, he noted that the Iranian currency, the rial, is highly volatile and has two exchange rates against the US dollar, the official rate approved by the Central Bank of Iran and the market rate, which is inconvenient for the calculation of Russian exports.
News that Tehran and Moscow are discussing the possibility of launching a digital currency backed by gold came out in early January when a representative of the Russian Crypto Industry Association told the economic daily Vedomosti that Iran’s central bank is mulling the development with Russian participation It has emerged. The tokens would be used to facilitate trade in the Persian region, the executive revealed.
A Russian digital currency backed by gold was first proposed in 2019
The idea to issue a Russian gold-backed stablecoin was first floated in May 2019 at a meeting in the State Duma attended by Bank of Russia Governor Elvira Nabiullina. At the time, MP Vladimir Gutenev proposed that the central bank initiate consultations on this issue with other BRICS countries, arguing:
gold is the most vulnerable asset. We could perhaps reach an understanding in China, India and Brazil.
“But these may be so-called stablecoins rather than cryptocurrencies,” said Anatoly Aksakov, and Nabiulina suggested that monetary authorities be open to stablecoins backed by real assets. The proposal for a “golden ruble” stablecoin was also included in a report by the VEB.RF Research and Expert Institute published in the summer of 2022.
Under pressure from Western sanctions, Russia and Iran are also exploring the option of using decentralized cryptocurrencies to circumvent restrictions on foreign trade. Last August, Iran placed its first official import order using crypto, and Russia has taken steps to legalize cross-border crypto payments. Digital rubles and crypto riyals not backed by gold are also in development.
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