The US sanctions have taken a toll on the Russian economy and the ruble. Just like other national currencies that experienced a sharp drop in value after the Trump’s Administration issued new sanctions, the Russian ruble dropped to a 2-year low in the summer of 2018.
However, a Kremlin economist now says that the negative impact of the US sanctions may be reduced with the help of cryptocurrencies. The economist, Vladislav Ginko, stated that the Russian government is planning to replace part of its USD reserves with none other but Bitcoin.
After Russia’s military officer, Sergei Scripal, was poisoned, Russia’s relationship with the United States worsened. As a result, the new sanctions completely tanked the national currency and the economy stagnated.
According to Ginko, in an effort to stabilize the falling ruble, the country will try to “de-dollarize” itself by investing in Bitcoin and reducing its US dollar reserve. Again, Ginko stated that the Russian President, Vladimir Putin, has definitely showed interest towards cryptocurrencies. The potential investment in Bitcoin could be around $10 billion. In fact, the cryptocurrency market accounts for nearly 8% of Russia’s GDP, which shows the strong interest in alt coins and their potential.
While the government has not officially announced any purchase of Bitcoin, according to experts, this amount could be as much as one sixth of the total market value of the “people’s currency”.
Russia is also stabilizing its EUR reserves and looking for ways to reduce the US “dominance” in its own economy. Bitcoin may be one way to help Russia.