According to recent reports, the Central Bank of Iran and the Russian government are working together to produce a new cryptocurrency that would be jointly backed by gold.

In a report by a Russian media outlet called Vedomosti, Iran and Russia are now collaborating on the development of a “Persian Gulf area token” that would be used as a mode of payment in international trade.

According to Alexander Brazhnikov, CEO of the Russian Blockchain and Crypto Industry Association, the token is planned to be released in the form of a gold-backed stablecoin. This information comes from Brazhnikov. Instead of using fiat currencies like the US dollar, Russian ruble, or Iranian rial, the stablecoin hopes to make it possible to do business across national borders.

The proposed cryptocurrency would be depleted in a special economic zone in Astrakhan, which is the same region where Russia began allowing Iranian cargo exports.

Anton Tkachev, a member of the Russian legislature’s Information Policy, Information Technology and Communications Committee, stressed that a unified stablecoin initiative would not be viable until the digital asset market in Russia is fully regulated.

After a series of setbacks, the lower house of the Russian parliament has once again pledged to start regulating cryptocurrency transactions in 2023.

Countries like Iran and Russia are among those that have made it illegal for their citizens to use cryptocurrencies like Bitcoin and stablecoins like Tether (USDT) to conduct financial transactions.

At the same time, Russia and Iran have been making concerted efforts to include cryptocurrency as a method of doing international business.

Amid continued restrictions on international trade, Iran’s Ministry of Industry, Mines and Commerce gave its blessing in August 2022 to the use of cryptocurrencies as a form of payment for imports entering the country.

Despite its longstanding opposition to the use of cryptocurrencies as a form of payment, the Bank of Russia has now indicated that it would allow the use of cryptocurrencies in international trade to lessen the effect of international sanctions.