Iran and Russia are planning to launch a stablecoin backed by gold for use in foreign trade settlements, instead of using the dollar, ruble, or rial. The information was provided by Alexander Brazhnikov, executive director of Russian cryptocurrency and blockchain association RAKIB.
Brazhnikov stated that the planned cryptocurrency will likely be a stablecoin, backed by gold, similar to Paxos Gold (PAXG) and Tether Gold (XAUT), which have market capitalizations of $512 million and $471 million, respectively.
Anton Tkachev, a member of the Duma Committee on Information Policy, Information Technology and Communications, confirmed that discussions about a new stablecoin are ongoing. He emphasized that the topic will only be seriously considered by the government once regulations for cryptocurrencies are in place in Russia.
The Russian Duma began working on a draft amendment to the Digital Financial Assets law on November 23rd, with the goal of creating regulations for cryptocurrencies and establishing a national crypto exchange. This was confirmed by Sergey Altukhov, a member of the Economic Policy Committee for United Russia, the party that holds 72% of the seats in the Duma and supports President Vladimir Putin.
“Regarding crypto, we support the advancement of digital financial assets and the digitalization of finance,” said Nabiullina. However, she clarified that digital financial assets are not limited to private cryptocurrencies, and that the position of the Central Bank is that private cryptocurrencies, which are opaque, carry high risks of volatility, and it is not clear who is responsible for them, should not be used in settlements.
Russia’s interest in gold has increased significantly since the invasion of Ukraine in February 2022, with over 50 metric tons of physical gold being purchased by Russian citizens in 2022, according to a survey of major Russian banks. Five out of the thirteen largest Russian banks sold 57 tons of physical bullion last year, surpassing the 40-50 tons forecasted by the Russian Finance Ministry in December. Russian citizens had purchased under six tons of gold in 2021, according to World Gold Council data.
The Russian Finance Ministry recently announced that they have doubled the holding limits of gold and Chinese yuan within the National Wealth Fund (NWF), with the new maximum limits being set at 40% for gold and 60% for yuan, up from 20% and 30% respectively. The NWF holds Russia’s oil revenues, and its total value is $186.5 billion.
In April 2022, the International Monetary Fund warned that Russia could potentially use the crypto ecosystem to circumvent Western sanctions that have been imposed on the country since the invasion of Ukraine in February, by utilizing its embargoed energy sector to mine Bitcoin and generate revenues.
