Iran and Russia have joined hands to develop a new cryptocurrency called the 'token of the Persian Gulf region', which will be a stablecoin backed by gold
Stablecoins are cryptocurrencies whose value is pegged to an external variable, and will not change with market volatility
The US and other developed countries have imposed sanctions on Iran and Russia because of their alleged role in global geopolitical instability. These countries plan to use cryptos to evade sanction
Sanctions refer to financial restrictions and prohibitions against getting into business with a foreign country or its representatives (citizens, corporations, etc)
The record of all cryptos is maintained on a decentralised ledger called blockchain. Sender and receiver of cryptos are identified only by their wallet address and no other personal info is required
In 2020, Iran's Industry, Mines, and Trade Industry approved use of cryptos for imports in Aug 2022. Iran then used $10-million cryptos to make its first-ever foreign import purchase
The Russian central bank, which has otherwise forbade citizens from using crypto, has agreed to permit crypto use in overseas trades to evade sanctions over the Ukraine war
Kamath tweeted on the issue by saying that this might be the beginning of “a new economic order”. He added, "No idea why it's getting no oxygen from the global press."
US sanctions will not have the same effect if sanctioned parties start using cryptocurrencies instead of US Dollar, which will alter the economic pecking order of the world