Russia to explore cryptocurrency backed by gold despite ban on internal use

Russia is working with the Central Bank of Iran to develop a joint stablecoin for cross-border settlements that would be backed by gold, according to reports.

Russia's Deputy Finance Minister Alexey Moiseyev said that Russia is working with many countries to issue a new cryptocurrency backed by gold. This move is to abolish transactions in fiat currencies like the US dollar and the euro.

According to the local Russian news outlet Vedomosti, Alexander Brazhnikov, the executive director of the Russian Association of the Crypto Industry and Blockchain, said that the Central Bank of Iran is considering the creation of a stablecoin with the Russian Federation for international trade transaction payments.

Zerodha co-founder Nikhil Kamath said in a tweet that, "Iran and Russia to issue a new stablecoin backed by Gold. Damn, if this picks up could be day 1, event 1 of establishing a new economic order everywhere. No idea why it's getting no oxygen from the global press."

Reports from Cointelegraph suggest that potential cryptocurrency would function in an Astrakhan special economic zone where Russia began to accept shipments from Iran.

Ban on use of cryptocurrencies

Interestingly, Iran and Russia are among the countries that have banned the use of cryptocurrencies like Bitcoin, Ethereum, and stablecoins like Tether (USDT) for payments. But, both countries have been working on adopting crypto as a tool of foreign trade.

Iran's Industry, Mines and Trade Ministry in August 2022 approved the use of cryptocurrency for imports into the country. The country's first international import order using crypto was $10 million.

Notably, the authorities of the European Union have enacted a ban prohibiting European firms from offering any cryptocurrency services to residents of Russia.