Iran and Russia partner on Gold backed Digital Currency

Iran and Russia are officially developing a “token of the Persian Region” according to Russian news agency Vedmosti. The cryptocurrency backed by gold, would be used for cross-border transactions between the two sanction-hit countries. Typically, Russia and Iran have settled in the US Dollar, Russian Ruble or the Iranian Rial.

This latest link up against the Dollar hegemon continues to fill in the picture of what a post-Dollar monetary reality would look like. On Monday’s News we covered how the Chinese and Russians are on the hunt for a new trade system. For the new currency to be implemented however, digital assets will need to become fully regulated, according to a top Moscow lawmaker. It’s one thing for the world to want to ‘de-dollarise’, another thing for a functional alternative to get established.

Developing a competitor to the SWIFT international payments system that is accepted by not only the BRICS nations, but over time the rest of the world, is a project that requires a lot of buy-in from a multitude of actors with, in many cases, contradictory motivations and ideologies. One thing is for sure, an alternative global currency will need to find something to back the system with a commodity that every nation always needs more of - and that would be gold.

Alexander Brazhnikov, the executive director of the Russian Association of the crypto industry, told Vedomosti, that the Central Bank of Iran is considering joining with Russia, and that both groups see Astrakhan, a free trade zone, as the starting point. Astrakhan is buying Iranian merchandise and the coin would be used in that region as a test case.

This new token wouldn’t be the first gold-backed token produced by the Russians. Late last month, Sber, one of Russia’s largest banking institutions, launched their own tokenised gold on their proprietary blockchain. The move comes after the passage of the Russian law “On Digital Assets” in January 2021, which now allows companies to tokenise various assets. Bitcoin and cryptocurrencies are still not supported by the Central Bank anywhere inside Russia, but the Bank of Russia accepted the need to legalise crypto, in September of 2022. What we are seeing now between these two gold-backed tokens are both sovereign and institutional players moving in this direction.

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