Gold-Backed Stablecoin Can Help Russia Circumvent Sanctions, Government-Owned Bank Suggests

The U.S. wouldn't be able to touch a “crypto-golden” ruble, VEB bank researchers say.

AccessTimeIconJun 23, 2022 at 3:45 p.m. UTC
Updated May 11, 2023 at 5:03 p.m. UTC
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Researchers at Russian bank VEB suggested that the country issue a gold-backed stablecoin for international payments to evade sanctions imposed after the country invaded Ukraine in February.

The government-owned bank's Institute of Research and Expertise entertained the idea in a report titled "Global Payments Under the Sanctions: Current State and Perspectives" (PDF in Russian) that says the Ministry of Finance must create a framework for how Russian companies under sanctions can use cryptocurrencies.

The report, presented Wednesday during the Saint Petersburg International Economic Forum, proposes measures to allow Russia to trade internationally, evading sanctions aimed at isolating the country from global capital markets.

Gold can be a useful tool to compensate for the loss of most of Russia's export revenue, the authors say. For one, the country can sell its reserves to buyers in countries that don't support the sanctions. The deals would be hard to track, because they would take place over the counter, the report says.

The metal can also serve as backing for a “golden ruble” stablecoin. “Americans won’t have any means to block operations with the crypto-golden ruble because the price will be tied to the price of gold on the global market,” the report reads. The stablecoin would be used exclusively for settling import and export transactions, not for payment inside Russia, it says.

One drawback: The stablecoin will need to exist for seven to 10 years before it establishes a track record as a reliable cryptocurrency, the authors note.

The authors also suggest increasing collaboration with China, India and other BRICS countries, Brazil and South Africa, including the creation of a blockchain-based settlement system. Alternatively, each country could issue its own digital currency circulating on national markets that would be connected by “corridors” for settlement.

The report mentions the popularity of crypto mining in Iran, saying that the country is successfully using cryptocurrencies to circumvent U.S. sanctions. Iran’s case “shows that cryptocurrencies can be a real alternative to the U.S. dollar in certain circumstances.”


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Anna Baydakova

Anna Baydakova was CoinDesk's investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.

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