Iran and Russia Working on Bilateral CBDC-powered Trade Solutions

Iran and Russia are collaborating on trade solutions powered by central bank digital currencies (CBDCs) and digital financial assets (DFAs), according to an Iranian official. Rahimi Mohsen, the trade attaché of the Iranian Embassy in Russia, stated that the use of CBDCs and DFAs could simplify trade between Tehran and Moscow. The implementation of CBDCs, such as Russia’s digital ruble and Iran’s crypto-rial, has the potential to alleviate the impact of sanctions on the two countries. Despite difficulties with CBDC-related payments, lawmakers intend to establish infrastructure and regulations for new payment methods. Maxim Chereshnev, the Chairman of Russia’s Council for the Development of Foreign Trade and International Economic Relations, believes that the cooperation between Russia and Iran in the CBDC space is strategically significant for Moscow and could strengthen its influence in the Middle East and Central Asia. Additionally, the use of CBDCs would facilitate transparency, increase transaction security, and simplify trade between states. Russian banks and firms have already started issuing DFAs, opting for blockchain-powered securities and commodities as part of their domestic investment strategies. President Vladimir Putin has signed a law allowing Russian companies to engage in cross-border DFA trade and use the digital ruble, but it does not permit the use of other countries’ DFAs or CBDCs. Belarus and other Russian allies are also accelerating their own digital fiat projects, seeking to decentralize cross-border payments. Russian lawmakers have even considered doing business with China using the digital ruble and the digital yuan.