During early 2023 there were reports that Iran was looking to create a gold backed digital currency to use for settlement with Russia. At the time, Russian law wouldn’t support settlement with gold backed tokens. However, that’s changed. Now, Russian newspaper Izvestia spoke to Iran’s trade attaché at the embassy in Russia, Rahimi Mohsen. He says the two countries are working together to address settlements using central bank digital currency (CBDC) and Russian digital financial assets (DFAs), the legal framework for tokenized assets.
With sanctions, the two countries are locked out of Swift for cross border payments and can’t easily trade in dollars or euros. Hence, they have resorted to local currency payments, which may not be ideal.
When the topic of the Iran-Russia digital currency arose in 2023, digital financial assets such as tokenized gold were not allowed to be used for payments in Russia. However, last month Russia passed legislation allowing their use for cross border payments precisely to skirt sanctions.
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