The Ministry of Foreign Affairs (MFA Russia) is reportedly considering replacing the United States dollar with not only traditional fiat currencies but also digital currencies, as Russia continues pushing de-dollarization.
It has been reported that Aleksandr Pankin, deputy minister of Foreign Affairs of Russia, reiterated the country’s plans to reduce the US dollar share in Russia’s international reserves and its usage in settlement with foreign partners.
However, the official said that MFA Russia isn’t excluding the possibility of replacing the US dollar with “some digital assets” alongside other currencies.
The official added:
“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.”
The report said that Pankin added that such replacement would require significant efforts from the government, including rebuilding established cooperation models between jurisdictions and businesses, as well as creating new mechanisms for new settlement systems. The official noted Russia’s de-dollarization campaign comes in line with the country’s efforts to avoid challenges posed by sanctions from the US government.
“Payments in U.S. dollars go through American banks and a clearing system, which allows Washington to block any transactions they deem suspicious.”
He added that the Russian government has not faced such issues with the euro or other fiat currencies and doesn’t plan similar measures for any other national currencies so far. For several years, Russia has been considering steps to cut the US dollar share in its $186-billion national welfare fund. Local authorities are planning to dramatically increase its holdings of Chinese yuan and invest in gold.
The latest remarks from the Ministry of Foreign Affairs further reinforce Russia’s apparent interest in using crypto for international settlement.
Thus, last week, Russian President Vladimir Putin said that it was “a bit early” to use cryptocurrencies for settling oil trades. The president also admitted cryptocurrency’s potential for transferring funds globally.