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- Russia and Iran are actively working to create a single token they can use across the Persian Gulf to settle international trade.
- The launch of a gold-backed stablecoin has left many wondering whether Russia and Iran will utilize Cardano’s soon-to-be-launched stablecoin, Djed.
Amid international trade sanctions, the Central Bank of Iran, in collaboration with Russia, is on the verge of jointly developing a gold-based stablecoin for cross-border transactions. The latest move comes as the two countries continue exploring ways to replace the USD with the Russian Ruble or Iranian Rial for international transactions.
A Token for the Persian Gulf?
Per the Russian news platform Vedomosti, the two countries are actively working to create a single token that they can use across the Persian Gulf to settle international trade. Accordingly, the proposed token will be in the form of a stablecoin backed by gold. Alexander Brazhnikov, head of the Russian Association of Crypto Industry and Blockchain, said the new stablecoin is to aid cross-border payment.
Additionally, the stablecoin will function within the region just as the United States dollar does for international transactions and may be either Rial or Ruble, the two countries’ respective fiat currencies. Furthermore, the report added that the proposed stablecoin would only operate in an economic zone in Astrakhan where Russia can accept cargo shipments from Iran. Anton Tkachev, a Russian lawmaker, stressed that the joint cryptocurrency project could only be operational if Russia implements crypto regulation.
Russia has had multiple delays in approving comprehensive crypto regulations for its digital asset market. However, the country’s lower house of parliament has pledged to begin regulating the virtual currency ecosystem in 2023. It is worth noting that both Iran and Russia have previously banned residents from using crypto assets like BTC and USDT stablecoins for transactions.
The two countries would likely reverse the ban since they are now actively working to adopt cryptocurrency to facilitate foreign trade between them. Last August, Iran’s Ministry of Industry, Mines and Trade approved digital assets’ usage for imports due to the strict international trade embargo on the country. The Bank of Russia previously opposed cryptocurrency for payment, but the latest agreement shows it is willing to change its stance.
Using Crypto to Evade Sanctions
Following Russia’s invasion of Ukraine in February 2022 and the subsequent economic sanctions against it, there have been speculations of Russia using cryptocurrency to avoid the west financial hammer. The sanctions meant that the oil-rich nation was disconnected from using SWIFT, the international payment messaging system. For emphasis, cryptocurrency allows the transfer of funds without needing third-party input due to its decentralized nature.
As the Western powers continue monitoring Russia to see how it evades its sanction, there is no evidence to show that it has been utilizing crypto assets to bypass the ban. This is evidenced by Russia’s unwillingness to approve digital assets’ usage for international transactions, not even in its current transactions with Iran. Nevertheless, as the international community continues to debate the possibility of using crypto to evade sanctions, Russia and its ally, Iran, may have found a way to do so.
Meanwhile, the launch of a gold-backed stablecoin has left many wondering whether Russia and Iran will utilize Cardano’s soon-to-be-launched stablecoin, Djed. According to the official Twitter handle of the Djed stablecoin, the stablecoin’s launch before this month’s end is still on track. The Djed team touts it as the first Cardano-based over-collateralized consensus stablecoin.
And yes, $Djed is still on track for launching THIS month 🚀
— 𓊽 DJED 𓊽 (@DjedStablecoin) January 14, 2023
