Iran and Russia are exploring the possibilities for a gold-backed stablecoin. Will it establish a new economic order?
Governments worldwide replaced the gold standard with fiat money in the 20th century to provide economic flexibility. However, fiat money has an unlimited supply, which could even lead to hyperinflation.
The Russian news media Vedomosti reported that Iran and Russia are collaborating to launch the “token of the Persian Gulf.” It will be a stablecoin that is backed by gold. Another key point is that the primary purpose of this stablecoin is to serve as a mode of payment for international trade and not to rely on fiat.
Are the countries trying to implement the pros of the gold standard to cryptocurrencies?
Gold-Backed Stablecoin to Avoid Sanctions?
Anton Tkachev, a member of the Duma Committee on Information Policy, confirmed negotiations for the token of the Persian Gulf between Iran and Russia. He further clarified that the state-level discussion for the gold-backed stablecoin would be actively discussed after Russia regulates cryptocurrency.
The ongoing Russia-Ukraine war has led to various sanctions on the Russian economy. Russia is also banned from accessing SWIFT (Society for Worldwide Interbank Financial Telecommunication), a service that provides the execution of financial transactions between banks worldwide.
Russia, a country that was once supporting the idea of banning cryptocurrencies, has been now looking at legalizing cross-border crypto payments.
The Global CBDC Adoption
Besides Iran and Russia, many other countries are rapidly approaching adopting the Central Bank Digital Currency. The Republic of Palau, an island country in the Pacific Ocean, is exploring the creation of a national stablecoin in collaboration with Ripple.
Surangel Whipps Jr., the President of Palau, in an interview with Bloomberg, said:
“Central Bank Digital Currencies is an idea that really has come out of cryptocurrencies and blockchain technology.
Palau itself, we don’t have a Central bank that’s established; we use US dollars as an official currency. In developing our collaboration with Ripple, our goal is to have a USD-backed stablecoin, which is really a step toward our own Central Bank Digital Currency.”
The European Central Bank has also been rapidly exploring CBDC. The European Commission intends to propose a regulation establishing a digital euro in the second quarter of 2023
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