Russian State Parliament Proposes Establishing Bitcoin Reserve: Mitigate Sanction Risks and Generate Substantial Profits
With the continuous rise in the price of Bitcoin, Russia, which has half of its foreign exchange reserves frozen, is turning its attention to decentralized Bitcoin assets. Russian lawmakers have proposed the establishment of a strategic Bitcoin reserve and the introduction of a new payment system, which can not only mitigate the risk of sanctions but also earn substantial profits.
Russian lawmakers propose establishing a strategic Bitcoin reserve
According to a report by TASS, Russian State Duma member Anton Tkachev has proposed the establishment of a strategic Bitcoin reserve for Russia.
Tkachev, a member of the Russian State Duma, has proposed to Russian Finance Minister Anton Siluanov to establish a Bitcoin strategic reserve in Russia through a national reserve similar to traditional currencies.
Due to geopolitical instability, traditional foreign exchange reserves, including the Chinese yuan, US dollar, and euro, are subject to volatility, sanctions, and inflation, posing a threat to Russia’s financial stability. Russia not only needs to introduce a new payment system but also needs to introduce alternative tools that are not dependent on a single country for reserves.
In the case of limited use of traditional international payment systems by sanctioned countries, cryptocurrencies are actually becoming the only tool for international trade. The Central Bank of Russia is preparing to launch an experiment on cross-border settlement of cryptocurrencies. Tkachev pointed out that in recent years, Bitcoin has been one of the highest-return assets among all investment assets. By December 2024, its cost will be $100,000, making Bitcoin not only a means of value storage but also an opportunity to earn substantial profits.
About half of Russia’s foreign exchange reserves are frozen
As of November 2024, Russia’s foreign exchange reserves amounted to approximately $631.6 billion. These reserves include foreign currencies, gold, and other international reserve assets. Gold reserves amount to $207.7 billion, accounting for 32.9% of Russia’s international reserve assets, the highest record since November 1999.
Since Russia’s special military operation against Ukraine in February 2022, European and American countries have imposed sanctions on Russia, resulting in the freezing of Russia’s sovereign assets and private investor funds. Approximately 300 billion euros of Russia’s foreign exchange reserves are frozen, with about 200 billion euros in the European Union, mostly held in the world’s largest clearing and settlement system, Euroclear.
The Russian Foreign Ministry recently stated that the freezing of Russian assets in Europe is a theft.
Russian President Vladimir Putin also stated at the financial summit held at the VTB Bank on December 4 that cryptocurrencies such as Bitcoin could be a better alternative to foreign exchange reserves, and no one can stop Bitcoin.
(Putin supports Bitcoin: Cryptocurrencies as an alternative to foreign exchange reserves, BRICS needs to establish a non-dollar financial system)
