IMF warns Russian sanctions could boost use of crypto and erode dollar’s supremacy
The International Monetary Fund (IMF) said on Friday that sanctions on Russia could push the use of cryptocurrencies, including bitcoin, and undermine the dominance of the US dollar as the world’s reserve currency.
While there is still a lot of debate about whether or not the Russian economy will be able to withstand the sanctions, there is one thing that is for sure: the Russian government is looking for ways to circumvent the sanctions.
Gita Gopinath, the first deputy managing director at the IMF, believes that are indications that some countries have begun “renegotiating the currency in which they get paid for trade,” she said in a Financial Times interview.
What will be the impact on crypto if Russia sanctions boost and erode dollar supremacy?
While the sanctions are unlikely to have an immediate impact on the cryptocurrency market, there are many more factors that can be expected to influence cryptocurrency prices and even the future of the industry as a whole.
Russia sanctions could lead to a crypto boom. Russia is a major player in the crypto world. It is, and will be the largest market for crypto in the coming years.
According to Gopinath, the current situation could encourage the adoption of currencies other than the US dollar, including cryptocurrencies ranging from stablecoin to central bank digital currencies (CBDCs), around the world.
She also warned of the lack of regulation around cryptocurrencies and the need to address this issue before their wider adoption.
Some cryptocurrency enthusiasts say Russian sanctions are already boosting the use of digital currencies. The threat of further punitive measures against Russia could further erode the supremacy of the dollar, they say.
“If the sanctions are not lifted, it would mean the whole world will face the situation of a weaker dollar,” he said. “The Russian economy is not ready to face that situation.”