Iran and Russia want to issue new stablecoin backed by gold

[Leviathan.007]

These two countries are both under the hardest economic sanctions and there are many haters all over the world the hate these two governments because of their recent actions these two are not popular enough to reach many clients for their stablecoins even if they create something like that. However, every government and company can create their stablecoin but the most important thing is if people will accept and use these stablecoins or not. but still, there is a possibility for these two countries to create a stablecoin just for the trades they do together which can be odd.

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[pooya87]

Russia and China have realized that it is not possible to replace the US Dollar with any of the fiat currencies. Other fiats (CNY, EUR, GBP.etc) are in a much worse state when compared to the USD.

I don't think it is impossible to replace USD considering that it has already happened for a considerable amount of trades between over a dozen different countries. But you are right, these fiat currencies are all bad not because of the shape they are in but because they suffer from the same exact flaw: "they have no cap". The reason why gold is being brought up is because it can place a cap on how much fiat they print. After all dollar was once supposed to be backed by gold and that was why it got to be international trade currency.

So for now, gold is the only reliable alternative.

Some experts suggest other stuff like energy (including fossil fuels). We know that world will continue needing fossil fuels despite all the talk of green energies since they are used in a lot of products (they are not just for burning). For example a barrel of oil could be always 100 Ruble or a 100 Rial, etc.

But unfortunately I don't see anybody paying attention to this, they just stick to gold which doesn't have the utility that energy has.

[jayce]

These two countries are both under the hardest economic sanctions and there are many haters all over the world the hate these two governments because of their recent actions these two are not popular enough to reach many clients for their stablecoins even if they create something like that. However, every government and company can create their stablecoin but the most important thing is if people will accept and use these stablecoins or not. but still, there is a possibility for these two countries to create a stablecoin just for the trades they do together which can be odd.

I dont think that's odd if the stablecoins later just used for their trades only, because they don't use USD as the payment tool currently, and beside that, each country preferred to use their own currency when doing trades. Gold is a good solution, but it's not efficient for big transaction, so instead they are creating that stablecoins.

[TheGreatPython]

Am I assuming this will be a case of a centralized token or something like that? Because I tried to find within the article any indication on what blockchain they plan to launch this token and I did not find anything.

Also, the way I see it, the success of this token would depend on the acceptation it would have in the markets and I doubt the United States and the European Union would allow any of their allies and businesses to accept this token as payment method. At best, it could become an standard in Russia, Iran, China and (if they are lucky) in their spheres of power (Venezuela, African countries, etc).

However, China already is pushing their own CBDC...

You are right with your assumptions. No doubt that this was centralized, the same with the CBDC because it was the banks and the governments are the ones that issued them. This is different to the normal cryptos that coins can be issued on different networks or blockchains like ETH, Tron and SOL. They have a blockchain of their own.

But like any other crypto, indeed that it will only be successful if it will be adopted by a lot of people or countries. I don't know if what is the status of US and Europe to Iran and Russia but if they are in a war then it will not be adopted by them. China has their own CDBC but that one is different from this, as it is said that it was backed by gold.

[Ozero]

But like any other crypto, indeed that it will only be successful if it will be adopted by a lot of people or countries. I don't know if what is the status of US and Europe to Iran and Russia but if they are in a war then it will not be adopted by them. China has their own CDBC but that one is different from this, as it is said that it was backed by gold.

The stablecoin that Russia wants to issue will most likely be used only for foreign trade transactions. This stablecoin is not designed for use by citizens of both Russia and other countries. This is a way to circumvent international sanctions in trade relations in general between sanctioned states.
Now Russia is buying weapons to wage war in Ukraine in Iran, Belarus, North Korea and other countries. Relations between Russia and Belarus are special due to the actual occupation of it by Russia, but this stablecoin can be used with other indicated states.

[Sithara007]

Some experts suggest other stuff like energy (including fossil fuels). We know that world will continue needing fossil fuels despite all the talk of green energies since they are used in a lot of products (they are not just for burning). For example a barrel of oil could be always 100 Ruble or a 100 Rial, etc.

But unfortunately I don't see anybody paying attention to this, they just stick to gold which doesn't have the utility that energy has.

How is it even possible to use fossil fuels as currency? Storage itself is complicated and is expensive. Storing a barrel of crude oil for a month costs anywhere from $0.20 to $1.00. And crude oil hasn't proved effective against inflation. Check the prices we had in 2009-14 and now. Volatility is another concern. In case of gold, it is easier to store and has very low volatility. And although green energy has failed to replace fossil fuels so far, I have noticed a sharp increase in electric vehicles during the past few years. The replacement is picking up pace.

[takuma sato]

I would rather have US dollars, included with the inflation, debt ceiling upcoming clusterfuck and so on, rather than trust Russia and Iran issuing IOU's over my so called gold backed stablecoin's ownership. Only someone that is deluded enough would trust these states over the US no matter how much you hate Russia. Same applies for China. I just tend to not trust countries where they make people disappear at Orwellian levels.

[NotATether]

Good luck with implementing that as they will have to interface with virtually every other cryptocurrency exchange in order to get it listed, and most of them are prohibited from operating in Russia in the first place so there will be practically nobody who will be able (or willing) to list it.

[Flexystar]

How funny it is that they are trying hard to mask the very existence of crypto currencies with the digital currency backed by this and that. It’s not just Iran or Russia but many other countries are trying to form their own digital coin and inject the same into their economy. Somehow it’s becoming the race as to who will be able to make it first successful economy through their nation. Do we really think they should be entertained?

Because no nation would have thought about the digital currency if Bitcoin would not have been into existence today. The current way of working would have been only banking.

[kryptqnick]

Iran and Russia have been getting along due to Russia's war against Ukraine. Iran is an expert of living under heavy Western sanctions, and they manage to produce weapons which Russia can use. Russia's got money to pay, so it's a partnership. Avoiding sanctions together by making a special coin to rely on, which would be backed by gold, sounds like a reasonable project to explore. It can be mutually beneficial, so maybe they'll go forward with it, as long as they can figure out how they share control over the currency (and if they can figure it out). I'm not confident that they'll come to agreement, as they wouldn't want the currency to be decentralized, but also wouldn't want just one of the parties in charge. So it's a good idea in theory but probably difficult in practice, as stablecoins normally have one particular authority in control (one company, one central bank, etc.).

[karabiber]

Sounds quite a lot like a desperate long shot though too... Why does Russia need to team up with someone to do this, are they doing THAT badly on their own? I thought they'd have a decent enough development firm for something like this at least, or is this more of a strengthening ties exercise (to which, maybe they don't need the currency anyway).

I thought there was already an Indian company that made digital gold in the past, is that not still a thing (but maybe India seem too neutral and a potential risk for now)?

They probably can't use something too decentralised (like PoW) because it'd either be expensive to run or it would get attacked (it might just get attacked anyway, like Russian TV did regardless of how it's made).

The reason why Russia does not do this job alone is the embargoes from the west. The same embargoes apply to Iran. Embargoes disrupt all international trade of these countries and these countries try every way to overcome the obstacles. I do not think that the stablecoin idea will give good results for countries, after all, they will not be able to trade with stablecoins, which they cannot do with fiat money. I don't think the West will allow trading with stablecoins. They only trade among themselves.

[Synchronice]

Sounds quite a lot like a desperate long shot though too... Why does Russia need to team up with someone to do this, are they doing THAT badly on their own? I thought they'd have a decent enough development firm for something like this at least, or is this more of a strengthening ties exercise (to which, maybe they don't need the currency anyway).

Of course Russia can do it on its own but usually when something is done between two countries, it's done by both of them and yeah, it also strengthens bonds between them. Also, Russia wants to show the world that it doesn't need the west and it can manage quite well with countries like Iran, India, China, etc. But I highly doubt that!

Sounds nice, but not really. At this point in time, verifiability has become the basis. Trust is certainly not enough.

Will there be a way for everyone to verify that the stablecoins are actually backed by gold? Apart from that, will there also be a way to verify that all the gold are real gold and not fake? Even China's gold reserves have fake ones.

USDT is not owned by a powerful government and yet it has even managed to issue USD-pegged tokens without a 1:1 reserve. Who will audit Russia and Iran's gold-backed stablecoin? Or should I ask, which auditing firm has the iron balls to refuse a report saying the stablecoin is sufficiently backed by genuine gold even if it's not when KGB and GU and FSB agents are all over your office?

And who cares? Who gives a shit? It will only be used between two countries, Russia and Iran. If they trust each-other, they can keep the business, otherwise, it's their issue. It would be beneficial for the world if their business relationship fails.
This man has the biggest balls in Russia.
Пoддepжy или пoддepживaю? Гoвopитe пpямo, Cepгeй Eвгeньeвич

[Sithara007]

Of course Russia can do it on its own but usually when something is done between two countries, it's done by both of them and yeah, it also strengthens bonds between them. Also, Russia wants to show the world that it doesn't need the west and it can manage quite well with countries like Iran, India, China, etc. But I highly doubt that!

Russia and Iran are countries with similar economic strengths. They are rich in petroleum and mineral resources. In order for this initiative be successful, they need the backing of countries which are consumers of these natural resources (China, EU, US, India, Japan.etc). India doesn't want to antagonize the Western bloc and EU/Japan/US are part of that bloc. So that leaves China as the sole superpower which can strengthen this initiative. Do they want to antagonize EU/US? They can do that, albeit with serious consequences.

[pooya87]

How is it even possible to use fossil fuels as currency? Storage itself is complicated and is expensive. Storing a barrel of crude oil for a month costs anywhere from $0.20 to $1.00. And crude oil hasn't proved effective against inflation. Check the prices we had in 2009-14 and now. Volatility is another concern. In case of gold, it is easier to store and has very low volatility. And although green energy has failed to replace fossil fuels so far, I have noticed a sharp increase in electric vehicles during the past few years. The replacement is picking up pace.

Producers of fossil fuel would be the main countries that use them to back their currencies and they don't need storage space since it is already stored in natural storages underground, they just increase/decrease their extraction if they need to.
As for the price, it is going to be challenging but the challenge is not specific to fossil fuels, any asset is going to have volatility and usage of fossil fuels this way could actually decrease their volatility significantly.
As for replacement, I don't see them replaced in our lifetime even electric cars need electricity that is partly generated using fossil fuels not to mention that a huge number of products are being created from fossil fuels which can never be replaced.

[Argoo]

Of course Russia can do it on its own but usually when something is done between two countries, it's done by both of them and yeah, it also strengthens bonds between them. Also, Russia wants to show the world that it doesn't need the west and it can manage quite well with countries like Iran, India, China, etc. But I highly doubt that!

Recently, the last of the largest banks in Russia was banned from using the dollar in settlements with other states. In trade with Pakistan, Russia has already agreed to use even Pakistani rupees. In Russia, difficulties simply appeared in using the currency in trade transactions with other states. It is unprofitable for other states to take Russian rubles now. Russia continues to fight, its economy is slowly falling apart both from the war and from the imposed sanctions. Therefore, the ruble will continue to fall in price and this process will take a long time. Therefore, Russia had a need to create something new, and in order for this currency to inspire confidence, it is backed by gold, which is also under sanctions.

[Z390]

It looks like competition to me, other countries never liked how it's always the dollar taking the lead, USD is very powerful and other powerful countries will always come up with something new that can over throne the US dollar, Russia always like standalone stuff I don't know why they decide to partner with another country on this one, something must be cooking behind the scene, and believe me, it's powerful.

[DrBeer]

A new crazy story from rogue / terrorist countries who once again want to "defeat the United States and nobody needs the dollar." At the same time, all such regimes keep their personal money in dollars )))

The thing about Gold is this.....

Many countries have not done independent audits on their Gold reserves, so nobody actually know how much Gold they have. Let's take the Gold that are stored in Fort Knox in the USA.... The last inspection by Members of Congress was on September 23, 1974, since then... the federal authorities who control the US gold reserves at Ft. Knox ....refused a comprehensive audit to be conducted.

There might as well be Gold painted bricks in those vaults, because nobody has tested it.    

Bitcoin is very transparent.... and anyone can do an independent audit on the coins that are stored on the Blockchain. So, I will not trust anything that are hidden in a vault, with no guarantee that it exists.  

Here you understand what's going on. Digital currency - it is generally not backed by anything! A brick painted with gold paint has at least some value. And a digital currency is... nothing Transparency is certainly indicative, but no country will ever fully disclose its financial data, never !!!! Tell me, why, for example, Russia has classified the same since the summer of 2022, a lot of ordinary budget indicators? And do you believe that those who hide generally accepted indicators will use a "fully transparent monetary system"? Are you seriously ?!

[DrBeer]

How is it even possible to use fossil fuels as currency? Storage itself is complicated and is expensive. Storing a barrel of crude oil for a month costs anywhere from $0.20 to $1.00. And crude oil hasn't proved effective against inflation. Check the prices we had in 2009-14 and now. Volatility is another concern. In case of gold, it is easier to store and has very low volatility. And although green energy has failed to replace fossil fuels so far, I have noticed a sharp increase in electric vehicles during the past few years. The replacement is picking up pace.

Producers of fossil fuel would be the main countries that use them to back their currencies and they don't need storage space since it is already stored in natural storages underground, they just increase/decrease their extraction if they need to.
As for the price, it is going to be challenging but the challenge is not specific to fossil fuels, any asset is going to have volatility and usage of fossil fuels this way could actually decrease their volatility significantly.
As for replacement, I don't see them replaced in our lifetime even electric cars need electricity that is partly generated using fossil fuels not to mention that a huge number of products are being created from fossil fuels which can never be replaced.

I see that about oil / gas production - you superficially know the topic you are writing about, as well as in many other things

Let me explain - oil and gas is not a water supply system for you, where you can turn on or off the tap with water, thereby increasing, reducing or even stopping the water supply.
For example, both reducing and increasing the "return" of a deposit is a technologically complex process. This is not to unscrew and tighten the valve. In addition, for example, in Russia, most of the fields have already passed the first and second stages of production (read what it is - it won’t hurt you for general development), and are at stage 3. And here is the most difficult thing, that it will be extremely difficult and EXPENSIVE for a technologically backward country implement and support.

Let me explain.
the "primary stage" is the extraction of only the "discovered" deposit. Natural mechanisms still work here, such as, for example, gravity drainage. The production factor at the initial stage, as a rule, does not exceed 15%. During further production, the pressure underground drops and becomes insufficient to further displace oil to the surface.

This is where the "second stage" begins. It typically consists of delivering external energy to the reservoir by introducing liquids (eg water) or gases (eg air, carbon dioxide) to pressurize underground. The average recovery factor after primary and secondary operations usually does not exceed 45%. But it is not eternal either. And we are approaching the third, final stage of oil production. Which is carried out using different technologies. The first of these reduces the viscosity of oil by heating. Another one is the injection of gas into the reservoir (carbon dioxide). And the last method is the so-called “chemical flood” method. It consists in mixing dense, insoluble polymers with water and introducing them underground. Tertiary production makes it possible to achieve an additional 15% of the volume of oil from the field.
So once again - most of the fields that are currently operating are either already at the third stage or are finishing the second. This has even been officially confirmed, you can read the reports of Rosneft and other production operators on production forecasts for the next 10-20 years. It talks about a noticeable drop in production due to the depletion of deposits.

And the conservation of deposits, for the same Russia, is a technologically irreversible procedure. And insanely expensive.

And further. Guess one of the reasons why Russia sells its oil and gas to China and India for a penny? I answer: because Russia has very small storage facilities! And after they are filled, the only way out will be either to burn the extracted raw materials, or to conserve the deposit! And this and that - pure losses, without the slightest chance of profit!
And here, for example, in Ukraine - the largest gas storage facilities in Europe, without which the gas transmission network, which Russia actively used. True, before unleashing a terrorist war against Ukraine, and economic terror against the EU.

So if there are no special problems for the Middle East, North American and other suppliers, then in Russia "everything is not clear." And given the sanctions and limited access to technology, the prospects are simply sad. no matter how hysterical propagandists are with fairy tales

[Negotiation]

Iran and Russia are adopting this approach to strengthen their two countries. Russia and Iran will launch a cryptocurrency to replace the US dollar for payments and the value of this cryptocurrency called a stablecoin is less volatile in price than digital assets such as the US dollar or gold and will protect investors from large falls in the broader crypto market. Iran is also collaborating with Russia to create a Persian gulf token that will be used as a means of payment in international trade.

[paxmao]

Bullshit. Gold is the best asset backed by gold. I would not give a cent to anyone - much the less to the RF or Iranian governments - on crypto backed by gold. As simple as that, if you want gold there are plenty of financial instruments to acquire and transfer, crypto does not add anything. To be honest, the best asset backed by gold is having gold, physical gold, and not known by your government if you can.