Top industry leaders and government officials from Russia and Iran recently convened in Tehran to discuss the potential of cryptocurrencies and blockchain technology in enhancing bilateral trade. The meeting took place during the renowned International Exhibition of Financial Industries, which brought together experts from the crypto and fintech sectors of both countries.
Among the prominent speakers were Alexander Brazhnikov, the Executive Director of the Russian Association of the Cryptocurrency and Blockchain Industry (RACIB), and Mustafa Amiri, Secretary of the Iranian Fintech Association. The discussions focused on the utilization of digital tokens to bypass sanctions and facilitate trade between the two nations. Notably, no Russian government officials were present at the panel session, indicating the industry-driven nature of the dialogue.
During the event, an announcement was made regarding a new financial instrument aimed at streamlining trade in national currencies. Iran's Bank Pasargad and Russia's largest bank, Sberbank, unveiled a banking guarantee letter that, when used in conjunction with the domestic letter of credit, simplifies transactions conducted in the ruble and the rial. This development is seen as a significant step toward redefining bilateral trade between the two countries.
The growing interest in cryptocurrencies stems from the economic challenges posed by international sanctions. Iran and Russia have been exploring alternative avenues to circumvent financial restrictions, with payments in national currencies already accounting for over 60% of trade transactions. While Iran made its first official import order with cryptocurrency in August of last year, Russia is considering the legalization of crypto payments in cross-border settlements.
The Russian Central Bank has expressed its intention to introduce a pilot program to supervise trading companies engaging in crypto transactions. Additionally, Rosbank, one of Russia's largest banks, reportedly facilitates trade for local businesses through a similar initiative. However, Alexander Brazhnikov emphasized that banking sector regulations might not be essential for companies seeking to trade using cryptocurrencies. He suggested that crypto brokerages and exchanges can play a vital role in facilitating such transactions.
Although Russian government officials have been cautious in approving crypto trade with Iran, the two countries have previously explored the possibility of co-launching a gold-pegged stablecoin. It is worth noting that several Russian firms have already engaged in crypto-powered trade without awaiting official authorization.
The International Exhibition of Financial Industries, renowned as the largest financial event in the Middle East, has become an important platform for economic activists to gather and discuss emerging trends and opportunities in the sector.
Experts have previously highlighted the increasing prevalence of peer-to-peer crypto trades in Russia, estimating a daily turnover of nearly $300 million. This practice could potentially undermine the reputation of traditional banks as P2P traders and unlicensed crypto exchanges leverage Russian commercial bank accounts for their transactions.
The discussions held between Russia and Iran reflect the ongoing efforts to explore innovative financial solutions that can enhance trade cooperation despite the challenges posed by international sanctions. As both countries navigate the evolving regulatory landscape surrounding cryptocurrencies, the potential for increased adoption and collaboration in this realm remains promising.
