Russia wants to replace US dollar reserves with digital assets in the long term

As Russia continues to push for de-dollarization, the State Department (MFA Russia) is reportedly considering replacing the U.S. dollar with not only traditional fiat currencies but also digital currencies.

In an interview with the local news agency Interfax on October 19, Aleksandr Pankin, Russ’s deputy foreign minister, affirmed the country’s plan to reduce the US dollar’s share of Russia’s international reserves and use it for settlement with foreign partners.

The official said the Russian Foreign Ministry was not ruling out the possibility of replacing the US dollar with “some digital assets” along with other currencies:

“It is possible in the long term to replace the US dollar with other currencies, both national and regional, as well as some digital assets.”

Pankin added that such a replacement would require significant government efforts, including rebuilding established models of jurisdiction-business collaboration, as well as creating new mechanisms for new accounting systems.

The official noted that Russ’s de-dollar campaign is in line with the country’s efforts to avoid challenges posed by US government sanctions.

“Payments in US dollars go through US banks and a clearinghouse system, so Washington can block any transactions it considers suspicious,” said Pankin. He added that the Russian government has not had such problems with the euro or other fiat currencies and has not yet planned any similar measures for other national currencies.

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Russ has been considering steps to cut the US dollar’s share of its $ 186 billion national welfare fund for several years. The local government plans to significantly increase China’s yuan holdings and investments in gold.

The MFA’s recent comments reinforce Russ’s apparent interest in using cryptocurrencies for international payments. Last week, Russian President Vladimir Putin said it was “a little early” to use cryptocurrencies to process oil transactions. The president also recognized the global remittance potential of cryptocurrencies.