Russia Plans To Launch Gold-Backed Stablecoin For International Trade: Report

Trade and financial matters between Iran and Russia gained momentum after Western sanctions on Russia for its invasion of Ukraine. They are trying to facilitate smooth trade between them.

The Russian Federation is planning to create and launch a gold-backed stablecoin for international trade and transactions. The matter surfaced in media reports after Russian state officials made a diplomatic visit to Iran recently. Officials in Iran have also indicated their desire to move. Anatoly Aksakov, chairman of the Financial Market committee at the lower house of the Russian parliament, Duma, said that the country is considering creating gold-backed stablecoin for transactions with Iran and other countries across the world, reported Parlamentskaya Gazeta newspaper.

As per the report, Aksakov said, "We discussed the issuance of stablecoins, digital financial assets (DFAs) backed by certain valuables." After the lawmaker's Russia visit, he added, " I spoke about gold, gold bars, refineries can provide them, or centres where gold is stored, and DFAs are issued against these reserves."

He explained that stablecoin backed by gold can be used for payments and related settlements between Iran and Russia. Aksakov also confirmed that the Iranian side has also expressed its agreement with the suggestion.

These announcements come after the lawmaker said that Iran has a huge debt for Russia-supplied goods and that its currency, the rial,  keeps fluctuating. The currency has two exchange rates to the US dollar which makes it even more difficult for trade and calculations in the context of Russian exports.

Earlier in January of this year, media reports surfaced about the possible launch of a digital currency between Russia and Iran. This is aimed at facilitating trade in the Persian region. However, Russia had indicated plans to issue a gold-backed stablecoin in May 2019. It was first discussed in a meeting held at Duman in which Elvira Nabiullina, governor of the Bank of Russia, also participated.

During that time, a member of the house, Vladimir Gutenev, had said that the country's central bank should have talks with the BRICS nations on this issue. He stated, "Gold is the least vulnerable asset. We could probably find understanding in China, India, and Brazil."

According to the VEB.RF Institute for Research and Expertise report released in 2022, a suggestion was given to create a "Golden Ruble."

All of these trade and financial matters between Iran and Russia gained momentum after western sanctions were imposed on Russia for its invasion of Ukraine. Both countries have been trying hard to facilitate smooth trade between them.

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