Russia is in the process of preparing an investment in Bitcoin to replace the United States dollar as a reserve currency. According to a Russian economist who has close ties to the Kremlin, this is being done in a bid to tackle the US sanctions.
The economist in question is Vladislav Ginko, who is based at the state-funded institution of the Russian Presidential Academy of National Economy and Public Administration, said that the government is making moves to make sure the US sanctions have minimal damage on the Russian rouble by replacing some of its US dollar reserves with the leading cryptocurrency, Bitcoin.
US sanctions on Russia over the past year have come after the poisoning of the former Russian military officer Sergei Skripal. The Russian economist believes Russia de-dollarisation decision is fundamentally a move to “protect its national interests due to a possible interruption of US nominated payments flows for Russian oil and gas”. In addition to this, he also claims that investment could be as much as $10 billion.
In recent years, Russia has had a spark in interest when it comes to cryptocurrencies. Even President Vladimir Putin expressing interest in the digital assets in recent months. The Russian economist is a believer that Bitcoin and the cryptocurrency industry as a whole now account for 8pc of Russia’s GDP, and investment to boost the nation’s reserves with the leading cryptocurrencies could begin in February.
Ginko went on to say:
“[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars. These sanctions and the will to adopt modern financial technologies lead Russia to the way of investing its reserves into Bitcoin.”
Official plans are yet to be announced by the Central Bank of Russia but they have said that it “publishes information on the foreign assets management with a six-month lag”. The country has shown signs of de-dollarisation by bolstering its holding of the euro, yen and renminbi.
A senior market analyst at the trading platform eToro, Mati Greenspan has spoken on the topic and said that there is “definitely an interest from the [Russian] government to do this”.
In speaking on the President meeting with the Russian founder of Ethereum, Vitalik Buterin to talk about the possibilities in the sector, Greenspan said, “we know that Vladimir Putin is a big advocate of blockchain technology. obviously, he doesn’t like the sanctions that have been placed on him and he’s already said that these types of sanctions are going to lead to de-dollarisation. This is more or less the direction the Russian government is going.”
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