Iran and Russia Collaborating on Trade Solutions Empowered by Bilateral Central Bank Digital Currency (CBDC)

Iran and Russia are collaborating on the development of trade solutions powered by Central Bank Digital Currencies (CBDCs) and “digital financial assets” (DFAs), according to an Iranian official. The trade attaché of the Iranian Embassy in Russia, Rahimi Mohsen, stated that the two nations are exploring the use of DFAs and CBDCs to simplify trade between Tehran and Moscow. Mohsen believes that these digital solutions could potentially mitigate the impact of sanctions, which both countries have been facing. To facilitate CBDC-related payments, Mohsen emphasized the need for the creation of infrastructure and regulations. Maxim Chereshnev, the Chairman of Russia’s Council for the Development of Foreign Trade and International Economic Relations, highlighted the strategic importance of a CBDC-powered partnership with Iran, as it would strengthen Moscow’s influence in the Middle East and Central Asia. Additionally, Chereshnev pointed out that the use of CBDCs would alleviate difficulties faced by Russian businesses when converting currencies and would increase transparency and transaction security. Russian banks and firms have already started issuing DFAs and are looking to increase domestic investment options. President Vladimir Putin signed a law earlier this year allowing Russian firms to engage in cross-border DFA trade using Russian-issued tokens and the digital ruble. However, the law does not permit the use of other countries’ DFAs or CBDCs in trade deals. Several other Russian allies, including Belarus, are also accelerating their own digital fiat projects. Russian lawmakers have even discussed the possibility of conducting business with China using the digital ruble and the digital yuan.