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"Token of the Persian Gulf Region” from Iran and Russia

The authorities in Russia and Iran are discussing the creation of a stablecoin tied to gold. The "Token of the Persian Gulf region" will be used for cross-border payments, but first a legislative framework for regulating cryptocurrencies is required.

Gold coin on the background of the flags of Russia and Iran.

It seems that crypto predictions for 2023 concerning the growth in popularity of stablecoins are beginning to materialise. Recently it transpired that Iran and Russia are negotiating to create a stablecoin tied to gold for cross-border payments.

According to material from the Russian edition of Vedomosti, Alexander Brazhnikov, executive director of the Russian Association of Crypto Industry and Blockchain, announced the creation of a "Token of the Persian region". The token will facilitate cross-border payments between Russia and Iran, without the need for fiat national currencies (ruble and rial). Payments between the two countries, previously denominated in US dollars, are no longer achievable due to sanctions. Thus, there has been a trend towards de-dollarization in both countries, coupled with a significant recent increase in trade turnover.

📢 Remember that stablecoins have a 1:1 binding to one of the world's major fiat currencies or exchange-traded commodities (gold, silver and other precious metals). To date, the two most popular gold-linked stablecoins are Pax Gold and Tether Gold. According to CoinMarketCap, the market capitalization of the stablecoin from Paxos is more than $514 million, and the market capitalization of the stablecoin from Tether exceeds $467.6 million.

According to Brazhnikov, the proposed stablecoin shall start working within a special economic zone inside the Astrakhan region. According to the plan, in 2023, the special economic zone Lotos will begin accepting cargo from Iran, thus the new stablecoin will become a useful means for payments between the countries.

Alexander Brazhnikov, Russian Association of Crypto Industry and Blockchain Director.
Alexander Brazhnikov, Russian Association of Crypto Industry and Blockchain Director. Source: Vedomosti

The special economic zone Lotos in the Astrakhan region was created by decree of the Government of the Russian Federation in 2014. Lotos specializes in the oil and gas industry, mechanical engineering and shipbuilding. The port infrastructure is also actively used to ensure smooth operation of the "North-South " transport corridor. According to a document from the official website, cargo transportation between Russia, Iran, India and other countries in the Persian Gulf is permitted through this corridor. We can assume that in the future the new stablecoin will become the means of payment not only between Russia and Iran, but also other countries using this transport corridor and ports in the Astrakhan region.

Astrakhan on the map.
Astrakhan on the map. Source: Ministry of external relations of Astrakhan region Russian Federation

However, not everything is so simple. Anton Tkachev, a member of the Information Policy Committee, said that the issue of launching a stablecoin will be actively discussed at the legislative level only after the creation of a regulatory framework for cryptocurrencies.

It can be assumed that this legislative framework will indeed be created in 2023, since the topic of international payments is really acute for Russia. According to the "TASS" news agency during the RBC forum "Crypto. Cryptocurrencies, mining and digital assets" on December 5 last year, the head of the State Duma Committee on the Financial Market, Anatoly Aksakov, said that the issue of crypto regulation is quite serious and requires a speedy solution, in this regard the adoption of the legislative framework is planned in 2023.

"Next year, the crypt will be in the legal field, I can only say unequivocally that it cannot be used in the Russian Federation as a means of payment for internal settlements,"- Aksakov said.

The official also noted that cryptocurrencies in Russia are already being used for settlements between countries, but a legislative framework is required to administer tax regulation for this process.

It looks like stablecoins tied to precious metals could really gain popularity in 2023. As we wrote earlier, Tether Gold was listed on the ICRYPEX exchange, opening access to XAUT for users from Turkey. Today we hear about the creation of a gold-linked stablecoin at the state level, which shows the real relevance of stablecoins, not only for the crypto market, but also for traditional economies. We will continue our observations and report the news!