Iran and Russia are currently collaborating on trade solutions that are 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 the two countries. He also noted that these digital currencies have the potential to mitigate the impact of sanctions imposed on both nations. Mohsen acknowledged that there are challenges with CBDC-related payments, but emphasized the need for the creation of infrastructure and regulations to support these new payment methods. Iran intends to cooperate with Russia in implementing these regulations, as the two countries maintain a strong trade partnership. Maxim Chereshnev, the Chairman of Russia’s Council for the Development of Foreign Trade and International Economic Relations, stressed the strategic importance of a CBDC-powered partnership with Iran for Moscow, as it would enhance its influence in the Middle East and Central Asia. Chereshnev further explained that the inability to make payments in USD and euros has forced Russia and Iran to use their own fiat currencies, resulting in difficulties in currency conversion. He believes that CBDCs can alleviate these challenges and simplify trade between states. The use of DFAs and CBDCs would also increase transparency and enhance transaction security. Russian banks and other firms have already started issuing DFAs and are exploring blockchain-powered securities and commodities. President Vladimir Putin signed a law earlier this year that allows Russian firms to engage in cross-border DFA trade using Russian-issued tokens. However, this law does not permit the use of other countries’ DFAs or CBDCs in trade deals. Several other Russian allies, including Belarus, are also progressing with their own digital fiat projects. Russian lawmakers have even considered conducting business with China using the digital ruble and the digital yuan.
