A leading Russian economist has claimed that American sanctions will ultimately undermine the role of the US dollar in the global economy – and help the cross-border adoption of the digital ruble.
Per News.ru, the comments came from Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers.
Razuvaev said that Washington’s “actions against Russia” in response to the war in Ukraine would “undermine global confidence in the American currency.”
In its place, Russian trading partners could well turn to CBDCs as a dollar alternative, Razuvaev said.
The economist said this scenario would likely be accelerated if the United States “for example” were to “transfer frozen Russian assets to Ukraine.” Razuvaev said:
“Unfortunately, the Russian Federation is not such a large part of the world economy. But, as we see, China is dumping American bonds and paying for Saudi oil in yuan. In a couple of years, Turkey and Azerbaijan may start trading using the digital ruble.”
Russia Prepares Legal Battle to Stall Seizure of Frozen Reserves – BNN Bloomberg https://t.co/NHiYrLDSk4
— Bill Browder (@Billbrowder) January 12, 2024
Could US Dollar Woes Lead to Russian Digital Ruble Joy?
Razuvaev opined that it was now “more important than ever” for Moscow to “secure foreign trade” links.
And while he claimed that the bulk of Russia’s trade with China and Middle Eastern nations should be conducted in yuan and Emirati dirham, the Russian CBDC would also play an important role.
The economist said that trade “in the CIS” would soon be conducted “using the digital ruble.”
The CIS, or Commonwealth of Independent States, is a collection of former Soviet Nations that remain largely aligned to Moscow.
Key members such as Belarus and Kazakhstan began accelerating their CBDC projects in the middle of 2023.
The states made their move just as the Russian Central Bank began its own pilot.
Top Russian lawmakers have also spoken about possible digital yuan-digital ruble integration.
However, Beijing has remained cagey on the matter, preferring to pilot its first cross-border e-CNY projects in Hong Kong.
Razuvaev claimed that the dollar would likely remain the world’s reserve currency. But he added:
“America’s actions have undermined the authority of the dollar. The biggest blows to the USD have been self-inflicted. And if this is indeed the case, it will be reflected in gold prices, which could rise sharply.”
The economist took aim at Washington, stating that freezing Russian Central Bank assets had proved counterproductive. He said:
“The United States, I think, was counting on the destruction of the Russian economy within three to four months. It originally wanted to return the assets. And now the White House doesn’t know what to do. The Americans themselves have planted a bomb under the dollar.”
Elvira Nabiullina, the Governor of the Russian Central Bank, speaking in late 2023. (Source: Bank of Russia/YouTube)
The US and allied nations blocked around $300 billion worth of sovereign Russian assets in Western countries just after the outbreak of war in 2022.
Some lawmakers have urged the EU and others to hand these assets to Ukraine, but others have claimed there is no legal mechanism for such a move.
In 2021, politicians including Foreign Minister Sergei Lavrov began claiming the digital ruble would help Moscow purge its economy of the dollar.
Around 600 Russians, including politicians and bank staff, are currently trialing the Russian CBDC. The pilot is slated to expand early this year.
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