Russia aims to replace US dollar reserves with digital assets in long term

Russia aims to replace US dollar reserves with digital assets in long term

Russia is pushing for de-dollarization. The Ministry of Foreign Affairs (MFA Russia), however, is said to be considering replacing the United States Dollar with traditional fiat currencies as well as digital currencies.

Aleksandr Pankin (Russian deputy minister for foreign affairs) reiterated Russia’s plans to reduce its U.S. dollar shares in Russia’s international reserve and its use in settlement with foreign countries in a Tuesday interview with Interfax.

Official said that MFA Russia doesn’t rule out the possibility of replacing U.S. dollars with “some digital assets”, along with other currencies.

It is possible to replace the U.S. Dollar with other currencies, both regional and national, as well some digital assets over the long-term.

Pankin stated that such a replacement would require substantial efforts by the government. This includes rebuilding existing cooperation models between jurisdictions, businesses, and creating new mechanisms to settle disputes.

Officials noted that Russia’s campaign to de-dollarize is in line with its efforts to avoid the sanctions imposed by the U.S. government.

Pankin stated that U.S. dollar payments are processed through American banks and a clearing service, which allows Washington the ability to block suspicious transactions. Pankin said that the Russian government had not encountered such problems with the euro and other fiat currencies, and hasn’t planned similar measures for other national currencies.

Related: Bank of Russia will assess Bitcoin volumes at $36B Leave banks

Russia has been contemplating steps to reduce the U.S. dollar’s share of its $186 billion national welfare fund for several years. Local authorities plan to significantly increase their holdings of Chinese Yuan and invest in Gold.

Further evidence of Russia’s interest in crypto-based international settlement is provided by the Ministry of Foreign Affairs. Russian President Vladimir Putin stated last week that it was too early to use cryptocurrency for oil trade settlements. He also acknowledged the potential of cryptocurrency for global fund transfers.

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