Evaluating Oil- and Gold-Backed Cryptocurrencies in Sanctioned Economies: Valuation, Stability, and Cryptographic Dimensions

Document Type : Research Paper

Authors

1 Faculty of Economics, University of Tehran, Tehran, Iran.

2 Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran.

3 Department of Smart Security, Konyang University, Nonsan, Republic of Korea.

4 Department of Computer Science, Electronics and Telecommunications, AGH University of Science and Technology, Kraków, Poland.

Abstract

Countries facing high inflation and sanctions, particularly resource-rich economies such as Iran and Venezuela, may benefit from resource-backed cryptocurrencies as tools for monetary stability. In this study, global oil and gold prices were converted into the Iranian Rial using the free-market U.S. dollar exchange rate. We assess the viability of a crude oil-pegged digital asset using daily data on Iran’s free-market exchange rates, global gold prices, and the Rial value of crude oil. Applying Jensen’s conditional dynamic alpha and GARCH-modeled volatility, we find that gold consistently outperforms the U.S. dollar in risk-adjusted returns, supporting the case for dual oil- and gold-backing. Integrating gold into an oil-backed cryptocurrency enhances stability and resilience against macroeconomic shocks. To ensure credibility and transparency, we examine cryptographic mechanisms including zero-knowledge reserve proofs, secure oracles, and smart contract governance. The results provide a replicable valuation framework for resource-backed cryptocurrencies, demonstrate their potential to deliver stable, risk-adjusted returns, and offer policy-relevant insights for sanctioned or inflation-prone economies with natural resources seeking alternative monetary instruments. This study contributes to the literature on asset-backed digital currencies by combining financial modeling with cryptographic design, highlighting the role of multi-commodity collateralization in strengthening decentralized monetary systems under economic and geopolitical constraints.

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Main Subjects

References

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History

  • Receive Date: 11 September 2025
  • Revise Date: 01 October 2025
  • Accept Date: 01 October 2025

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