The sanctions that the West has imposed on Russia have major consequences for the country. But they also have major consequences for the rest of the world, as we now notice rising inflation. In addition, according to the International Monetary Fund (IMF), the status of the dollar could be damaged and the adoption of cryptocurrencies such as bitcoin (BTC) accelerated.
Dollar sees power dwindle
In a interview IMF official Gita Gopinath said in the Financial Times that there are signs that countries are already looking at other currencies. The US dollar used to be the obvious choice for global trade, but sanctions seem to be changing that.
Countries fear that they could be “held hostage” by the United States. For example, the sanctions have prevented Russia from accessing most of its foreign exchange reserves. And while this shows the power of the dollar, it also shows countries that they should not want to be too dependent on it. The IMF therefore expects that the dollar will see its power dwindle, although the power would not disappear completely:
“The dollar would remain the main global currency even in that landscape, but fragmentation at a smaller level is certainly possible,”
Role for bitcoin?
Gopinath also argues that the sanctions could also accelerate crypto adoption. Think of bitcoin and ethereum (ETH), but also stablecoins that are linked to fiat currencies. However, the official warns that little regulation exists at the moment. In any case, the European Union already took a big step yesterday after the ECON committee adopted the controversial bill that so-called unhosted wallets should be curbed.
Is there a role for bitcoin in this new landscape? It seems so. Russia previously said it was looking at the cryptocurrency. If Russia-friendly countries want to pay with the cryptocurrency, Russia is open to accepting it, said Pavel Zavalny, chairman of the Russian Committee on Energy.