Iran and Russia are reportedly in discussions for the possible issuance of a stablecoin to be used for international settlements. A stablecoin is a type of crypto that is backed by more stable assets such as fiat currencies like the U.S. dollar or precious metals like gold.
The Central Bank of the Islamic Republic of Iran is considering the possibility of issuing a stablecoin to facilitate trade in the region, according to Bitcoin.com. The project will be done with the participation of Russia, according to the head of the Russian crypto industry organization.
Should the project pushes through, the newly minted token could be used to settle international settlements according to Alexander Brazhnikov, the Executive Director of the Russian Association of Cryptoeconomics, Artificial Intelligence, and Blockchain (Racib). The executive also revealed that the crypto would be backed in gold, which would mean it’s a stablecoin.
“It is assumed that the token will be backed by gold, it would be a stablecoin,” Alexander Brazhnikov told the local publication Vedomosti.
Russian authorities are yet to adopt comprehensive regulations that will make Bitcoin (BTC), Ethereum (ETH), and other cryptos legal in the country, with the Bank of Russia expressing its opposition to such a move. However, a proposal to allow the use of a gold-backed stablecoin has been circulating last year.
At the moment, Pax Gold (PAXG) is the largest cryptocurrency backed by digital gold and is an ERC20 based on the Ethereum blockchain. It has a market cap of over $511 million and is ranked 74th in terms of capitalization.
Anton Tkachev, a member of the Committee on Information Policy, Information Technology, and Communications of the State Duma, the lower house of the Russian parliament, has confirmed the ongoing negotiations between Iran and Russia for the possible issuance of the gold-backed crypto. However, Tkachev also noted that the topic would be actively discussed at the state level only after crypto is fully regulated.