Vladimir Putin, Russia president, is focused on de-dollarization to lower the country’s economic exposure to the US dollar. News coming in reveals that the Country’s Foreign Affairs Ministry plans to replace the US dollar with fiat currency & Crypto.
Alexander Pankin, the Deputy Minister of Foreign Affairs of the Russian Federation, said that the government would have to put in extra effort to see the plan through. Pankin highlighted the following roles the government should play to see the project succeed;
- Rebuilding of established Corporation models between jurisdictions and businesses
- Make new methods for fresh settlement systems
The deputy minister added that plans to ditch the dollar are in alignment with Russia’s efforts to deal with challenges sanctions from the American government pose.
Here are some of the Sanctions that the United States maintains on Russia
- Russia’s 2014 Ukraine invasion
- Evil cyber crime such as interference with elections
- chemical weapon use
- Abuse of human rights
- Illegal trading with North Korea
- supporting the Syrian and Venezuelan government
Pankin also reveals that payments are made with the dollar and pass through American banking systems during the interview. These funds pass through a system that clears them and in turn, allows the banks to cancel dubious exchanges.
According to the official, other currencies such as the Euro or other fiat currencies don’t pose similar risks.
Russia has been thirsty for de-dollarization strategies for a while now. In a 2019 report by Bloomberg, they revealed that the first year of Vladimir’s phase-out of the dollar cost the country close to seven billion in losses.
This significant loss is that the Country’s Central Bank made investments in weak currencies such as the Chinese Yuan & the Euro.
Putin plans to increase the Chinese Yuan investments & start gold investments.
The thirst continues, and Russia’s MFA statement shows the country’s determination. Russia plans to increase the Chinese Yuan investments & start gold investments.
This report comes a few days after Russia’s President Vladimir Putin stated that cryptocurrency has potential. Although he praised the value of these digital assets, Vladimir feels that they are not an excellent replacement for the United States dollar.
Putin feels like Crypto is may not be suitable for major exports such as oil. He added that it might be too soon to talk about the use of Crypto in oil trading.
According to Russia’s president, Crypto has the advantage of high energy consumption because of the computing power necessary for minting.
Putin also believes that the United States would make a massive mistake if they used the dollar as a sanction instrument. Finally, Russia says it gets forced to move to other currencies as it has no other option.
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