The government of Russia has been actively pushing to reduce its dependency on the US dollar for trade settlements with foreign partners. Since the US sanction, they’ve been considering alternative traditional currencies to replace the USD, and digital currencies could be part of the option, according to the Deputy Minister of Foreign Affairs, Aleksandr Pankin.
Russia Could Use Crypto Against US
In a recent interview, Pankin said Russia could replace the US dollar with some digital currencies, alongside digital assets.
“There is no doubt about the expediency of continuing to work on further reducing the share of the dollar in national international reserves, as well as its use in settlements with foreign partners,” Pakin said. “It is possible to replace the American dollar with other currencies, both national and regional, and in the future, probably, with some kind of digital assets.”
Previously, Russia’s deputy prime minister, Alexander Novak, stated that the government might launch oil supply contracts based on cryptocurrency rather than USD, as part of the move to cut down the usage of the American currency. However, the president, Vladimir Putin, said it’s still early to use crypto for such trades.
US Fears Crypto Will Undermine its Sanction
The US government is already worried that cryptocurrencies can be used to boycott its sanction, just like Russia is mulling. In a recent report, the Treasury Department noted that cryptocurrency can provide its adversaries or countries under its sanction, new ways of hiding cross-border transactions.
As a result, they are planning to deepen their institutional knowledge and capabilities about digital currencies. “We are mindful of the risk that, if left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions,” the report reads.
The US government sanctions countries or people who violate human rights, partake in supporting terrorism, or conduct other illegal activities.