Russia considers removing US dollar reserves and having digital assets in the long term.
Reports say the Russian Ministry of Foreign Affairs (MFA) is trying to swap cryptocurrencies for the US dollar to settle oil trades.
Despite the fact that Russian president, Vladimir Putin, believes that it’s "a bit early" to replace USD with digital assets as the payment method for their oil trades, the Russian government seems to be determined to swap dollars for cryptocurrencies.
In an attempt to de-dollarize, Russian deputy minister of Foreign Affairs, Aleksandr Pankin, stated the Russian government’s plan to cut the US dollar’s role in their trade settlements and international reserves, according to an Interfax report on Tuesday and :
Mr. Pankin talked about the US dollar replacement alternatives:
"It’s possible to replace the U.S. dollar with other currencies, both national and regional, as well as some digital assets in the long term."
To make this replacement happen, great effort is required and certain measures need to be taken by the government. Establishing new mechanisms for new settlement systems, as well as rebuilding current collaboration models between jurisdictions and enterprises.
This measure was totally in line with the general policies of the Russian government and served as an attempt to dodge US sanctions and the problems it posed.
Regarding the main reason for this decision, Pankin says: "Payments in U.S. dollars go through American banks and a clearing system, which allows Washington to block any transactions they deem suspicious." And he clarified that since they haven’t had any such problems with the euro or other fiat currencies, they are not going to take any similar countermeasures against any national currency as yet.
It’s also interesting to know that cutting the US dollar share of its $186-billion national welfare fund has always been an important issue that the Russian government wished to achieve. Thus, Russia is going to invest in gold, ditch the US dollar and raise its Chinese yuan holdings.
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