Russia wants to replace its US dollar reserves with digital assets in the future.

Since Russia has continued to move towards the de-dollarization of its foreign reserves, the Russian Ministry of Foreign Affairs (MFA Russia) is considering changing the United States dollar with traditional fiat currencies as well as digital currencies.

Recently, the Ministry of Foreign Affairs of Russia, through its deputy minister, Aleksandr Pankin, restated that the country plans to decrease the United States dollar fraction of Russia’s foreign reserves, including its use in the settlement of foreign partners’ debts. He made the government’s stance on the issue known in an interview on Tuesday with a local media agency, Interfax.

Plans to De-dollarize Russia’s Reserve in Full Gear.

The deputy minister declared that MFA Russia will not exclude the possibility of swapping the United States dollar with “other digital assets” as well as other nations’ fiat currencies. According to Pankin, the replacement of the U.S. dollar with other nations’ fiat currencies is possible, nationally and regionally. In addition, part of the Russian reserves can also be held in selected digital assets in the long run. Pankin also said that such a swap requires substantial strategies from the government.

Actions on the part of the Russian government include the overhauling of established partnership models existing between jurisdictions and corporations, as well as the creation of new mechanisms for modern settlement systems. The official clearly stated that Russia’s plan to de-dollarize her international reserves is in line with the nation’s efforts to prevent challenges occurring as a result of sanctions from the United States government.

Pankin confirmed that “Payments in U.S. dollars go through American banks and a clearing system, which allows Washington to block any transactions it deems suspicious.” He further added that the Russian government does not encounter such problems with other fiat currencies or the Euro, and it does not intend to take related steps for any other fiat currencies at the moment.

The Russia–U.S. Rift Continues

Recall that the present United States administration levied a raft of fresh sanctions against Russia in April because of alleged interference in the US 2020 election, a massive cyberattack against the U.S. government and corporate systems, criminal annexation, and forceful occupation of Crimea, including human rights abuses. And the Russian government has denied all of the allegations leveled against her.

For many years, Russia has considered different ways to reduce the U.S. dollar stake in its $186-billion national welfare fund (NWF). Local parliaments intend to drastically expand their ownership of the Chinese yuan and its investment in gold.

The alterations to the Russian NWF are expected to commence within the next couple of months. Once complete, the percentage of euro investments in the reserve is predicted to stand at 40%, the Chinese yuan at 30%, and gold could be at 20%. Meanwhile, the British pound and Japanese yen will most likely consist of 5% each.

The recent comments from the Ministry of Foreign Affairs further prove Russia’s obvious interest and plan to use cryptocurrency for international trade settlement. Last week, the Russian President, Vladimir Putin, explained that it was “a bit early” to adopt cryptocurrencies for the settlement of oil trades. The president also acknowledged cryptocurrency’s potential for making payments internationally.

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