According to a Russian university lecturer with ties to the government, Kremlin might be investing massively in Bitcoin in order to circumvent the new U.S. sanctions. Notably, the move could happen “in a matter of weeks.”
Vladislav Ginko of the Russian Presidential Academy of National Economy and Public Administration spoke exclusively to Micky and asserted that the new U.S. sanctions will push the Kremlin into diversifying its cash reserves into Bitcoin. Ginko have had been associated with the government for about 20 years, added that the shift might come quite soon.
Over the past few months, Ginko has appeared on various Russian media platforms doing his bit to promoting the adoption of Bitcoin as a haven asset. Commenting on the issue, Ginko said:
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).
Minimizing Dollar’s Dominance
Country’s like China, Iran, Venezuela, and Russia are exploring ways to reduce its US Dollar dependence. In December 2018, Russian President; Vladimir Putin, declared that in the wake of new sanctions, the country had no choice but to cut down on its use of the Dollar in international trade. President Putin said at the time:
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.
Ginko suggests that the Kremlin will start diversifying its reserves in February 2018. Notably, if the Russian government and the elite class invest massively in Bitcoin, the price of the asset could experience a sudden upward surge. A similar situation was observed in 2018 when wealthy Chinese citizens reportedly moved money into BTC in the wake of an accelerated currency devaluation by Beijing.
While the Kremlin has been stocking up on gold as a shield against economic sanctions, reports indicate that the government is selling U.S. government debt in exchange for the precious metal. Russia had already tripled its gold reserve, by August 2018, as it gears up for renewed economic tussles with the U.S.