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Iran and Russia Exploring CBDC and DFA Trade Solutions
An Iranian official has confirmed that Iran and Russia are working on Central Bank Digital Currency (CBDC) and “digital financial asset” (DFA)-powered trade solutions. Rahimi Mohsen, the trade attaché of the Iranian Embassy in Russia, mentioned that nations are exploring the use of DFAs and CBDCs to simplify trade between Tehran and Moscow.
Need for Regulations in CBDC Trade
Mohsen highlighted the potential of CBDCs, such as the digital ruble and Iran’s crypto-rial, to mitigate the impact of sanctions on both countries. He emphasized the necessity of creating regulations and infrastructure for new payment methods to address existing difficulties in CBDC-related payments.
Cooperation for Implementing New Regulations
Mohsen expressed Iran’s intention to cooperate with Russia in implementing new regulations, aiming to enhance their trade partnership. The current sanctions have increased the interest of both countries in collaborating, as it could strengthen Moscow’s influence in the Middle East and Central Asia.
Challenges in Fiat Trades
Russian firms face challenges in non-USD fiat trades, leading to losses in trade deals due to discrepancies in currency market rates. The use of CBDCs could simplify trade, increase transparency, and enhance transaction security between Iran and Russia.
Russian Partners Embracing DFAs
Russian banks and firms have started issuing DFAs for cross-border trade, aiming to increase domestic investment options. The law signed by President Vladimir Putin allows Russian firms to engage in cross-border DFA trade and use the digital ruble for trading.
Global Expansion of Digital Fiat Projects
Several countries, including Belarus, are accelerating their digital fiat projects to decentralize cross-border payments. Russian lawmakers are considering business opportunities with China using the digital ruble and the digital yuan.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
