Days after Russia revealed its partnership with Iran in developing a gold-backed stablecoin that will be used for trade settlements, the Kingdom of Saudi Arabia has expressed its interest in trading currencies other than fiat like the U.S. dollar.
The kingdom’s finance minister said Tuesday he has no issues talking about currencies used in trades as long as they would help improve global trade.
“There are no issues with discussing how we settle our trade arrangements, whether it is in the U.S. dollar, whether it is the euro, whether it is the Saudi riyal,” Mohammed Al-Jadaan told Bloomberg, adding, “I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world.”
Saudi Arabia has maintained a currency peg to the U.S. dollar for decades, and a new currency to settle its trades could mean it is exploring more relations with other countries like China, which is a crucial player in global trading.
When Chinese President Xi Jinping visited Saudi Arabia in 2022, it was discussed that China would purchase more oil from the Middle East and mentioned settling trade deals using yuan, the Chinese currency.
“We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the U.S. and we want to develop that with Europe and other countries who are willing and able to work with us,” the kingdom’s finance minister said.
Al-Jadaan also mentioned that the kingdom is providing support to countries it considers “vulnerable” including Egypt, Turkey and Pakistan.
“We are investing heavily in these countries and will continue to look for opportunities to invest,” Al-Jadaan added. “It’s very important to bring stability.”
Saudi Arabia’s position on using other currencies aside from the U.S. dollar to settle trade engagements came after Russia’s announcement earlier this week that it is working on a gold-backed stablecoin to settle trades.
This said stablecoin is currently being developed to be used in a special economic zone Astrakhan, where Russia opened up for Iranian cargo shipments.
“We offer mutually acceptable tokenized instruments that will be used on these platforms, which are essentially clearing platforms that we are currently developing with these countries. Stablecoins can be pegged to some generally recognized instrument, for example, gold, the value of which is clear and observable for all participants,” Russia’s deputy finance minister Alexey Moiseyev said.