As Russia continues to push for de-dollarization, the Ministry of Foreign Affairs (MFA Russia) is reportedly considering replacing the US dollar not only with traditional fiat currencies, but also with digital currencies.
In an Oct. 19 interview with local news agency Interfax, Russia’s Deputy Foreign Minister Aleksandr Pankin reiterated the country’s plans to reduce the US dollar’s share of Russia’s international reserves and its use in settlement with foreign partners.
According to the official, MFA Russia does not rule out the possibility of replacing the US dollar with “some digital assets” alongside other currencies:
“In the long run, it is possible to replace the US dollar with other currencies, both national and regional, as well as some digital assets.”
Pankin added that such a replacement would necessitate significant government effort, including the rebuilding of established cooperation models between jurisdictions and businesses, as well as the development of new mechanisms for new settlement systems.
The official noted that Russia’s de-dollarization campaign is consistent with the country’s efforts to avoid the challenges posed by US sanctions.
“Payments in US dollars are processed through American banks and a clearing system, allowing Washington to block any transactions it deems suspicious,” Pankin explained. He went on to say that the Russian government has never had such problems with the euro or other fiat currencies, and that it has no plans to implement similar measures for any other national currencies in the future.
Russia has been considering steps to reduce the U.S. dollar share of its $186 billion national welfare fund for several years. Local governments intend to significantly increase their holdings of Chinese yuan and invest in gold.
The latest remarks from the MFA highlight Russia’s apparent interest in using cryptocurrency for international settlement. Last week, Russian President Vladimir Putin stated that using cryptocurrencies to settle oil trades was “a little early.” The president also acknowledged cryptocurrency’s potential for global money transfers.