In light of the sanctions imposed on Russia, both nation-states and individual citizens throughout the world are likely to find it “extremely appealing” to preserve control of their own money, and countries may begin to migrate to bitcoin (BTC) for foreign reserves, according to Pantera Capital’s Dan Morehead.
Morehead, Pantera Capital’s CEO and Co-Chief Investment Officer, stated in his most recent newsletter:
“Countries may soon begin to use bitcoin as a form of foreign/cloud reserve. Many nations and individual citizens will find the opportunity to hold their own currency reserves highly tempting.”
He went on to say that regular folks are drawn to bitcoin because they want to “shield themselves from the financial effect of their government/policies.” dictator’s
Meanwhile, Morehead claimed that recent Western-led sanctions against Russia have already demonstrated that foreign reserves stored in fiat currencies controlled by other countries are not as secure as previously supposed.
Notably, this understanding comes after the Central Bank of Russia has been deprived of the majority of the USD 630 billion in foreign reserves it owned prior to the war.
This has resulted in a drop in the value of the Russian ruble, leading the central bank to boost interest rates to 20%, which Morehead believes “should kill the property market.”
Furthermore, significant Russian corporations traded abroad have seen their share values completely collapse, while Russia’s domestic stock market remains closed.
“Everyday Russian civilians are being financially devastated as a result of the decisions of their leadership,” Morehead wrote.
Morehead’s remarks come after the US and other countries indicated they would “freeze” assets owned by the Russian central bank in their countries in a move to cut off funding for the Ukrainian war.
Furthermore, a bipartisan group of US senators announced on Tuesday that they will draft legislation to restrict Russia from selling even the actual gold that it has as part of its reserves.
The bill would impose “secondary sanctions” on American entities that interact with or transport gold from Russian central bank reserves, as well as entities that enable physical or electronic sale of gold in Russia.
The goal is to include the measure in a comprehensive spending bill that is scheduled to be passed on Friday, according to the article.
Russia has the world’s fifth-largest official central bank gold holdings, trailing the US, Germany, Italy, and France. According to the World Gold Council, the Russian central bank owns 2,301 tonnes of the yellow metal in total.