Iran and Russia are reportedly working together to issue a new stablecoin backed by gold. The move is seen as a way for the two countries to bypass economic sanctions and avoid using the US dollar in international transactions.
According to Russian media outlet Vedomosti, the new stablecoin will be a gold-pegged cryptocurrency, with each unit of the stablecoin representing a certain amount of gold. The gold will be stored in a secure location, but the exact details of the storage arrangements are yet to be disclosed.
The stablecoin will be used for international transactions between Iran and Russia, with the goal of increasing trade and economic cooperation. Other countries that are interested in using the new digital currency will also be allowed to do so.
Currently, the largest gold-backed stablecoin on the market is Paxos Gold (PAXG), with a market cap of $512 million, followed by Tether gold (XAUT) at $471 million, according to Coinmarketcap data.
Alexander Brazhnikov, executive director of the Russian Association of Crypto Industry and Blockchain, believes the move will aid both nations.
Iran and Russia have been subject to economic sanctions by the US and other Western countries in recent years. The new stablecoin is seen as a way for the two countries to bypass these sanctions and conduct international transactions without relying on the US dollar.
However, both Iran and Russia have banned the usage of cryptocurrencies, including stablecoins, as legal payment methods.
The move signals growing interest in gold-backed cryptocurrencies as a way to provide stability in an increasingly volatile world economy.
Several other countries have also begun to explore the use of gold-backed cryptocurrencies as a way to stabilize their economies and avoid the risks associated with fiat currencies.
