Could bitcoin be replacing the USD in Russia? This was the notion of a high profile Russian economist.
If Russia embraces bitcoin, which could happen in the coming few months could cause the resurgence of another bull run in the market.
Russia Embraces Bitcoin
Ditching the US dollar for bitcoin by the Russian government may come as a shock but considering the impact of US sanctions, it is logical that Russia would want to counteract the damage using the cryptocurrency.
Having been forced and sanctioned to dump US dollars and US assets, the country is looking to invest what could amount into billions into the world’s number one crypto coin
The Russian government is certain to the extent that the country’s plight of not been able to use the dollar would motivate other countries to also explore other currency alternatives as well.
The country has voiced out that it is not against cryptocurrencies and may start its reserves diversification as early as February 2019.
Looking in the Way of the Bitcoin Alternative
Apparently, Russia is not the only country trying to replace US dollar.
Other countries such as Iran, Venezuela, and China have also been exploring new avenues to reduce their reliance on the US dollar.
Vladimir Putin, Russia’s president had been quoted saying,
“Russia as a sovereign country does not have any goal of moving away from the dollar but it is the dollar that is moving away from us”
President Putin has never publicly condemned bitcoin or cryptocurrencies in general, unlike other notable world leaders.
He has been known to have noted a few risks with the developing industry but has also highlighted that there are enormous advantages to the new technology.
The potential removal of the US dollar from Russian international trade has long been discussed by the country’s financial authorities and the President is seemingly excited at the thought of the country been able to eventually totally move away from the US dollar.
Though the process is a bit slow, the country has been able to make several transactions without the use of the dollar.
Would this Mean a Surge in Bitcoin?
The potential investment from Russia at this point may be due to the clamouring of some outlets for the country to embrace bitcoin as an asset haven. If or when the investment finally goes through, it could lead to an upward surge in bitcoin similar to the situation in early 2017 when wealthy Chinese moguls and residents moved their assets into bitcoin.
Not only is the Russian government diversifying its assets, but the country is also in league with China in an effort to develop a new payment system.
According to sources, this new payment system would be totally and completely independent of the US dollar with discussions still on-going as to the Yuan or Rubble to be used in their bilateral trades.
Despite the surge this move could cause if followed through, some argue that it might be unsuccessful due to the predominance of the US dollar in international trade and the weight of its sanctions. But nevertheless, Russia is determined on its move and has been stockpiling non-digital gold by exchanging its US debt for gold to the tune of tripling its gold reserves in preparation for potential fresh sanctions from the USA and the EU.
Do you think that Russia can pull through with this move?
What effects do u think this move will have on the Russian economy, bitcoin and cryptocurrency at large?
Share your thoughts and opinions in the comments below.