Iran & Russia Aim to Launch a Gold-Backed Stablecoin: Report

Iran and Russia are investigating the possibility

of a gold-backed stablecoin. Will it bring a new era of an economic order?

In order to provide economic flexibility, governments around the world replaced the gold standard with fiat money in the twentieth century. However, fiat money has an infinite supply, which could lead to hyperinflation.

As per a Russian media outlet, Iran and Russia are working together to develop the "Persian Gulf token." It will be a stablecoin with gold backing. Another important aspect to note is that the primary goal of this stablecoin is to act as a form of payment for international trade rather than rely on fiat.

Are countries attempting to transfer the benefits of the gold standard to cryptocurrencies?

Gold-Backed Stablecoin to Avoid Sanctions

Anton Tkachev, a member of the Duma Committee on Information Policy, revealed negotiations between Iran and Russia for the Persian Gulf token. He went on to say that the gold-backed stablecoin would be actively discussed at the governmental level if Russia regulates cryptocurrency.

The ongoing Russia-Ukraine conflict has resulted in a number of sanctions imposed on the Russian economy. Russia is also barred from using SWIFT, a service that allows banks all over the world to execute financial transactions.

Russia, which earlier pushed for a cryptocurrency ban, is now considering legalizing cross-border crypto payments.

CBDC Adoption Around the World

Aside from Iran and Russia, many other countries are also on the edge of adopting the CBDC. The Republic of Palau, an island nation in the Pacific Ocean, is working with Ripple to develop a national stablecoin.

Furthermore, the European Central Bank has been rapidly exploring CBDC. In the second quarter of 2023, the European Commission plans to propose legislation establishing a digital euro.

Also read: EU Finance Ministers Issue Political Statement on Digital Euro