Business 9 January 2019

Erik Gibbs

Russia reportedly to ditch US dollar for Bitcoin

According to a university lecturer in Moscow, Russia could be contemplating dumping the U.S. dollar in favor of cryptocurrencies. The move comes as the country’s government is looking for options to circumvent sanctions imposed by the U.S. The lecturer, Vladislav Ginko, asserts that a decision could be made within “a matter of weeks.”

Ginko is also a member of the Russian Presidential Academy of National Economy and Public Administration. He has been involved with activity at the Kremlin for over 20 years and says that new sanctions introduced by President Trump against Russia are the catalyst, forcing Russia to consider purchasing massive amounts of Bitcoin Core (BTC) in order to keep the economy moving.

In an exclusive with Australian media outlet Micky, Ginko stated, “US sanctions may be mitigated only through Bitcoin use. Because of US sanctions, Russia’s elite is forced to dump US assets and US dollars and invest hugely into Bitcoins. The central bank of Russia sits on $466 billion of reserves and has to diversify in case there are limited opportunities to do it (in the future).”

The U.S. has introduced sanctions against a number of countries, including Russia, Iran, Venezuela and China. Since their implementation, the countries have been looking for ways to reduce their dependence on the U.S. dollar and digital currencies could be the best solution.

For his part, President Putin has stated that Russia has no alternative but to significantly cut its ties to the U.S. dollar. Last year, when the new sanctions were put in place, he said, “We have no goal of moving away from the Dollar. It’s the dollar that’s moving away from us. Those making such decisions are not shooting themselves in the foot, but somewhere more delicate, further up the body.”

Beginning next month, the Kremlin is expected to investigate alternatives to its dollar dependency, according to Ginko. He has become somewhat of a crypto advocate recently, appearing on a number of media platforms in Russia to espouse the benefits of increasing adoption of digital currencies.

Russia has reportedly been purchasing large amounts of gold in light of the sanctions as well, causing the price of the precious metal to jump to a three-year high. Putin is said to also be in communication with China in order to develop stronger economic ties that could result in a new payment system that would not be linked to the U.S. dollar.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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