Russia & Iran Turn to Digital Currencies to Bypass Sanctions
Amidst financial sanctions, Russia and Iran are innovating their trade systems. They're turning to national currencies and exploring digital financial assets (DFAs) and tokenization of state currencies. This shift aims to simplify trade and mitigate the impacts of sanctions.
The two nations are collaborating on a platform for digital currencies, CBDCs, and tokens. Iran, facing currency issues with its three exchange rates, sees digital solutions as a potential remedy. Russia's fintech company Lighthouse has already issued a bond in Chinese yuan as a DFA, demonstrating the feasibility of these digital assets.
Currently, bilateral trade between Russia and Iran is settled in national currencies due to sanctions. Both countries are working on 'new calculation methods', including digital central bank currencies (CBDCs) and DFAs, to further streamline their trade.
Russia and Iran are actively exploring digital currencies and DFAs to overcome financial sanctions and currency challenges. While they're not the first to consider these solutions, their collaboration and progress could pave the way for other nations facing similar obstacles.
