Russia is considering the issuance of digital financial assets (DFA) in the form of gold-backed stablecoins. The DFA is supposed to serve as a payment mechanism for exports and imports between Russia and its trade partners.
During a recent meeting, the agenda has been discussed in Iran, although the idea was originally offered in 2019, when Russian Central Bank was asked to initiate the discussion to create a national cryptocurrency denominated in gold within the framework of the BRICS countries (Brazil, Russia, India, China and South Africa).
Amid a wide range of sanctions imposed by Western countries, Russia is seeking alternative methods of payment with other countries for the supply of fuel (such as coal, gas, oil) and other commodities.
One of the state government institutions in mid-2022 published a report on the prospects for cross-border payments with the use of DFA under sanctions restrictions. The Institute proposed the following system: the state issues a gold-backed DFA and creates an exchange where the DFA is traded for fiat currency and is used to pay for any goods. After that, a seller can exchange the DFA for the desired currency. It is assumed that the US will not be able to block transactions backed by stablecoins because its’ exchange rate is pegged to the international price of gold.
In addition, the BRICS countries will discuss the creation of a single currency at the upcoming summit in August 2023. Taking into account the fact that last year 6 more countries filed an official application to join the bloc (including Egypt and the UAE), the BRICS currency can become an analogue of the euro and rival the US dollar on the global level.