- An Iranian official has acknowledged that Russia and Iran are collaborating on trade solutions powered by “digital financial assets” (DFA) and CBDC.
- The commerce attaché of the Iranian Embassy in Russia, Rahimi Mohsen, stated that “nations” were “exploring the use of DFAs and central bank digital currencies” in an interview with the Russian media outlet Izvestia.
“Regulations for CBDC Trade Need to Be Created,” Iran and Russia
The attaché claimed that CBDCs might “potentially mitigate the impact of sanctions,” citing the digital ruble and Iran’s “crypto-rial” scheme as examples.
Since the start of the conflict in Ukraine in 2022, the US, the EU, and allies have imposed various sets of sanctions on Russia.
In the meantime, the UK government said last week that Iran is now subject to new sanctions as a result of a missile strike on Israel in mid-April.
While acknowledging that there are still “difficulties” with payments related to the CBDC, Mohsen stated that legislators would need to set up the necessary framework and laws for new payment options.
He said that Iran “intends to cooperate with Russia” to “implement” new regulations, as “Tehran maintains an effective trade partnership with Moscow.”
The head of Russia’s Council for the Development of Foreign Trade and International Economic Relations, Maxim Chereshnev, asserted that sanctions packages are making Tehran and Moscow “more interested than ever” in working together.
A “partnership” with Iran fueled by the CBDC is “strategically important,” according to Chereshnev.
He clarified that Moscow might be able to “strengthen” its “influence in the Middle East and Central Asia” as a result of the move.
The chairman went on to say that Russia and Iran are now compelled to do commercial dealings in their own fiat currencies due to their “inability to make payments in dollars and euros.”
However, Chereshnev clarified that this leads to problems with currency conversion.
Additionally, he said, there were “discrepancies” between the rates set by the Iranian government and those set by the market.
Consequently, the current loss in every commercial agreement that Russian enterprises conduct using currency amounts to “about 20-25%.”
CBDCs, according to Chereshnev, would lessen this. The “launch of settlements negotiated via DFAs and CBDCs can “ease trade between governments,” he claimed, using Russia and Iran as examples.
He also stated the digital developments will allow dealers to “increase transparency, and boost the security of transactions.”
Are Additional Russian Partners Prepared to Trade CBDCs?
In an effort to expand local investment possibilities, Russian banks and other businesses have started to issue DFAs, which include commodities, securities, and more powered by blockchain technology.
President Vladimir Putin signed a bill earlier this year that let Russian businesses can use tokens produced by Russia to conduct cross-border DFA trading.
Numerous other partners of Russia have started speeding up their own digital fiat initiatives. Among them is Belarus, which plans to use the blockchain network known as Hyperledger Fabric.
Lawmakers in Russia have also discussed utilizing the digital yuan, endorsed by Beijing, and the digital ruble for trade with China.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
