In Kuala Lumpur Summit 2019, Iran, Malaysia, Turkey and Qatar decided to seriously consider trading among themselves in gold dinar as well as use a barter system to avoid any future economic sanctions.
Chandar GuptaLevel 2
Will 2019 Kuala Lumpur Summit help in promoting the gold and barter system and beat the sanctions?
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Ahsan
It is possible. Iran is already doing it with India, China and other Asian countries.
The key is to scale it, which would be difficult. The trade can be even concluded through barter e.g. oil for sugar without exchanging currencies etc.
Still, the trade would be illegal if caught. If the company caught, by the US or other watchdogs, were multinational, it would be slap with penalities. The small companies would not get much notice and can play under the radar.
Even the US authorities would not be able to do anything against those companies which do not use foreign banks for payment processing or have no assets in foreign banks.
Binita Sarkar
One solution will be free trade or regional trade agreements. Turkey is trying to get free access to the EU, but not much success so far. It will make things worse for Turkey if it gets some FTA with Iran or some other countries.
Some key players were also missing in the summit, which was expected due to Saudi pressure. Only 20 countries showed up out of 57 Muslim-majority countries.
Let’s assume that even these 20 countries agree to start trading based on barter or gold. The question is how much trade they are doing with each other currently.
The first step would be to improve mutual trade and reduce reliance on oil & gas (particular for Iran and Qatar).
Obaid Shah
Virtual currency pegged with gold or basket of the member countries physical currencies can be an ideal option. Central banks of the member countries would manage it. Traders would be able to buy and sell the special currency and use it for mutual trading purposes within the block. It could be an advanced form of euro.