Russian Economist: ‘US Sanctions Will Undermine Dollar and Boost Digital Ruble’

Prominent Russian economist Alexander Razuvaev predicts that the escalating American sanctions against Russia will ultimately weaken the role of the US dollar in the global economy and boost the adoption of the digital ruble. Razuvaev, a member of the Guild of Financial Analysts and Risk Managers, believes that Washington’s actions against Russia in response to the conflict in Ukraine will erode trust in the American currency. As a result, he suggests that trading partners of Russia may seek alternative cross-border digital currencies, including central bank digital currencies (CBDCs), such as the digital ruble. Razuvaev argues that if the United States were to transfer frozen Russian assets to Ukraine, it would likely accelerate the shift away from the dollar. He cites China’s move away from American bonds and its payment for Saudi oil in yuan as indicators of a potential trend. Additionally, Razuvaev highlights the possibility of Turkey and Azerbaijan trading using the digital ruble in the near future. The economist emphasizes the importance for Russia to secure foreign trade links, suggesting that while trade in yuan and Emirati dirham with China and Middle Eastern countries is crucial, the digital ruble will play a significant role in transactions within the Commonwealth of Independent States (CIS), a collection of former Soviet nations. Belarus and Kazakhstan have already begun accelerating their CBDC projects, aligning with Russia’s own pilot program. Razuvaev acknowledges that the dollar will likely remain the world’s reserve currency but believes that America’s actions have undermined its authority, potentially resulting in a rise in gold prices. Razuvaev criticizes the United States for freezing Russian Central Bank assets, claiming that it was a counterproductive move that has backfired, ultimately harming the dollar. In response to the frozen assets, Russia has been pushing for the adoption of the digital ruble to reduce its dependence on the dollar. Currently, around 600 individuals, including politicians and bank staff, are participating in the pilot phase of the Russian CBDC, with plans for expansion in the coming year.