Russia intends to buy Bitcoin to replace the U.S. dollar as a percentage of its reserve currency accord to reports. The information was released in a statement by a leading Russian economist, Vladislav Ginko.
“[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars,” Mr Ginko said.
“These sanctions and the will to adopt modern financial technologies lead Russia to the way of investing its reserves into Bitcoin,” reported the Telegraph.
The reason is obvious. American and EU sanctions have stifled the Russian economy and the Kremlin is keen to reduce the influence of the US dollar on its monetary operations. De-dollarization is well under way in the Russian Federation where its main source of revenue, oil and gas, is primary still traded in dollars. Moscow, and China, Iran, very much want to change this and have begun to trade in their own currencies.
Russian President Vladimir Putin is highly interested in cryptocurrency which is becoming a material portion of Russia’s gross domestic product. He sees it as a way to get out from under the dollar’s yoke, and relieve pressure on Russian banks.
Bitcoin has been highly volatile but the cryptocurrency is now trading significantly less than its highs last year, approximately $3,500 per coin. It may be a very good time to buy and other investors could tag along from the increase in price due to Russian significant demand.
The global financial system which was set up under the American dollar at the end of WWII is starting to crumble. It is ironic as the 20th century wars were primarily started for economic reason. We would do well to remember that history often rhymes.