The Russian government is set to start investing heavily in Bitcoin as a means to reduce the effects of new US sanctions. This is according to Vladislav Ginko, a high-profile Russian economist and university lecturer with close ties to the Kremlin.
Russia to Replace USD with Bitcoin
During an interview with Micky.com, Vladislav Ginko – a lecturer at Moscow’s prestigious Russian Presidential Academy of National Economy and Public Administration – shared that new US sanctions will soon lead the Kremlin to diversify its cash reserves by investing in Bitcoin.
Ginko, who has worked with the Russian government for over two decades, anticipates that the move will take place over the course of the coming weeks. He argued that “US sanctions may be mitigated only through Bitcoin use. Because of US sanctions, Russia’s elite is forced to dump US assets and US dollars and invest hugely into Bitcoins. The central bank of Russia sits on $466 billion of reserves and has to diversify in case there are limited opportunities to do it (in the future).”
Russia is by no means a stand alone case: China, Iran and Venezuela are all looking for ways to reduce their dependence on the US dollar. Last November, Russian President Vladimir Putin asserted that the new sanctions left the country with no choice but to reduce its use of US dollars within the international market.
Putin stated: “We have no goal of moving away from the dollar. It’s the dollar that’s moving away from us. Those making such decisions are not shooting themselves in the foot, but somewhere more delicate, further up the body.”
If both the Russian government as well as new institutional investors decide to enter the Bitcoin market, prices would most likely experience a dramatic upsurge.
The Kremlin has been stocking up its gold reserves as a means of protection against US economic sanctions. Russian reports indicated that the Kremlin was selling US government debt in exchange for gold. By August 2018, Russia’s gold reserves had tripled in anticipation of new economic tussles with the United States.
The Russian government is further clamoring for closer economic ties with China as they continue to search for new payment systems that will be independent of the dollar.