crypto for all
Join
A
A

Complete Decoupling Between Iran and Russia

Fri 29 Dec 2023 ▪ 4 min read ▪ by Nicolas T.
Getting informed Payment

After China, it is with Iran that Russia has just finalized an agreement to trade in their local currencies instead of the US dollar. When will bitcoin come into play?

A dollar bill with a graph on top

Russo-Persian De-dollarization

The president of the Iranian central bank Mohsen Karimi and his Russian counterpart Elvira Nabiullina have concluded agreements in Moscow to conduct bilateral exchanges using their national currencies.

“Banks and economic actors can now use non-SWIFT interbank systems to perform transactions in local currencies,” read Iranian state media.

These systems are, on the one hand, the SPFS (System for Transfer of Financial Messages) designed by the Russian central bank. And on the other hand, the Asian Clearing Union (ACU) overseen by Iran.

Disconnected from the SWIFT network much longer than Russia, Iran has developed an alternative with the central banks of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka, and Myanmar. The payment system was unveiled this summer.

“De-dollarization is no longer a voluntary choice of certain countries, it is an inevitable response to the militarization of the dollar,” declared the first Vice President of Iran, Mohammad Mokhber.

Additionally, members of the Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia) also signed a free trade agreement with Iran on December 25th.

It is also worth noting that the Persians have recently joined the BRICS club, which openly advocates for the de-dollarization of economic exchanges.

Given that Iran is an emerging export power with its immense reserves of gas and oil. Only Russia has more gas. Its oil reserves are the most vast after those of Canada, Saudi Arabia, and Venezuela.

A Monetary Rebellion Leading to Bitcoin?

Iran has become increasingly important to the Kremlin since Western sanctions related to the conflict in Ukraine have limited its export routes.

The naval blockade of the Red Sea, orchestrated behind the scenes by Tehran, will benefit the ambitious Russia-Iran-India North-South international transport corridor (INSTC).

Russia, Iran, and India signed the INSTC agreement in May 2022. It is a multimodal network – ship, rail, road – through three axes: West, Trans-Caspian, and East. The Russian port of Astrakhan on the Caspian Sea is crucial for these three corridors plunging into the Indian Ocean via the Iranian deep-water port of Chabahar.

Another proof of the rapprochement between Russians and Iranians: military cooperation. Iran provides drones in exchange for Su-35 fighter jets and Mi-28 attack helicopters.

The conflict in Palestine seems to be used by regional powers to increase pressure. The ultimate goal being to end the hegemony of the dollar, upon which the standard of living of Americans depends.

In this context of fragmentation of payment systems and reserve currencies, bitcoin should find its niche. It is already widely used in Iran as well as in Russia to bypass the disconnection from the SWIFT network.

Bitcoin is an absolute store of value as well as a stateless and uncensorable payment network. This is exactly what the world needs to trade on equal terms and soothe international relations.

Maximize your Cointribune experience with our "Read to Earn" program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.



Join the program
A
A
Nicolas T. avatar
Nicolas T.

Bitcoin, geopolitical, economic and energy journalist.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.