In the wake of unilateral economic sanctions imposed by the United States led by President Trump’s administration, Russia is speculated to be considering counter measures to combat America’s long hold in the current diplomatic/economic war.
According to Vladislav Ginko, a high-profile economist and lecturer at Russia’s Presidential Academy of National Economy and Public Administration in Moscow, the Russian government is considering the acquisition of $470 billion dollars in Bitcoins in a bid to have a part of its currency reserves from fiat to cryptocurrencies as well as avoid US trade restrictions.
The renowned economist further indicated that though a move of this magnitude will require planned execution and with the Russian government still yet to go public on the development; he opines that the government could kick start with a 10 billion dollars bitcoin purchase in this first quarter (Q1) of 2019. In his words;
U.S sanctions may be mitigated only through Bitcoin use. I believe that the Russian government will start diversifying its reserves with Bitcoin in February this year when US congress will introduce new sanctions against Russia.
Russia isn’t the only nation faced with these sanctions. Other countries including Iran, North Korea, Venezuela and Turkey have all been hit by U.S sanctions resulting in a quest for cryptocurrency options due to economic downturn, restricted financial activities, inflation and falling values of their respective fiat currencies (as seen with the Bolivar, Lira) against the U.S Dollar.
While Venezuela through its President Nicholas Maduro has begun a process of adoption of a national digital currency named Petro which they claim to be backed by their oil reserves, the country is yet to record spectacular progress with the Petro.
Turkey on its part has made no concrete counter policies, with Russia’s latest proposition seeming like a more success-oriented approach considering Bitcoin’s wide acceptability, its fit in the asset class, Bitcoin’s standing as a store of value and its decentralization hence subject to no control by a single economic power.
Even as Russia maintains a partly crypto stance, its financial elite are forced to dump US assets and USD to invest hugely in Bitcoin.
Citing examples of Russia’s antecedent interest for alternatives to the US dollar, President Vladmir Putin is quoted to have previously expressed his desire to reduce the influence of the U.S dollar. His statement reads:
We have no goal of moving away from the dollar, it’s the dollar that is moving away from us… Because there’s instability when it comes to doing business with the dollar, this gives rise to a desire – and it’s happening all around the world – to find alternative reserve currencies and create a financial system independent from the dollar.
The Russian government is yet to confirm these statements, however, the speculations and propositions have been applauded among prominent crypto enthusiasts and economists; just as they expect other nations to follow suit as Trump continues his rigid economic policies.
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