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IMF Warns Russia Sanctions Threaten to Undermine US Dollar Dominance – Finance Bitcoin News

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IMF Warns Russia Sanctions Threaten to Undermine US Dollar Dominance


Financial sanctions imposed on Russia over its invasion of Ukraine may result in reduced dominance of the U.S. currency, according to a high-ranking official at the International Monetary Fund (IMF). The confrontation could lead to fragmentation of the world’s current monetary system, the top representative warned.

New Currency Blocs May Emerge Amid Mounting Restrictions on Russia, IMF Says

Russia’s decision to invade Ukraine has been met with waves of Western sanctions that have limited Moscow’s access to its foreign currency reserves and the global financial market. According to Gita Gopinath, first deputy managing director of the IMF, the unprecedented measures could gradually decrease the dominance of the U.S. dollar.

Speaking to the Financial Times, the top IMF official also warned that the restrictions, including those on the Central Bank of Russia, could encourage the emergence of small currency blocs based on trade between groups of nations. Gopinath, nevertheless, predicted that the greenback would remain the world’s major currency but didn’t rule out a fragmentation at a smaller level. She elaborated:

We are already seeing that with some countries renegotiating the currency in which they get paid for trade.

The Russian Federation has been trying to reduce its dependence on the American currency for years, especially after the United States imposed sanctions over the annexation of Crimea in 2014. Russia is putting an emphasis on “dedollarization,” Deputy Foreign Minister Alexander Pankin stated in an interview with Interfax in October.

Following the latest round of penalties, introduced in response to Russia’s military assault on Ukraine, officials in Moscow have expressed interest in using cryptocurrencies and are even ready to accept bitcoin for energy exports, alongside the Russian ruble. Efforts to legalize the crypto space have been gaining support and lawmakers have been working to adopt comprehensive regulations.

Prior to the war, Russia held approximately a fifth of its foreign reserves in dollar-denominated assets, part of which being overseas in countries like Germany, France, the U.K., and Japan, that are now taking steps to isolate it from the global financial system.

Gopinath noted that the growing use of other currencies in global trade would lead to further diversification of the reserve assets held by central banks. “Countries tend to accumulate reserves in the currencies with which they trade with the rest of the world, and in which they borrow from the rest of the world, so you might see some slow-moving trends towards other currencies playing a bigger role,” she explained.

The IMF official pointed out that the dollar’s share of international reserves had fallen by 10 percentage points to 60% in the past two decades. Around a quarter of the decline can be attributed to the rise of the Chinese yuan. Beijing has been trying to internationalize the renminbi including by promoting its digital version.

Gita Gopinath believes the war will also boost digital financial assets, from cryptocurrencies to stablecoins and central bank digital currencies (CBDCs). “All of these will get even greater attention following the recent episodes, which draws us to the question of international regulation. There is a gap to be filled there,” she commented.

Tags in this story
Chinese Yuan, Crypto, Cryptocurrencies, Cryptocurrency, currencies, Currency, Dollar, IMF, renminbi, reserve currency, restrictions, ruble, Russia, russian, russian ruble, Sanctions, U.S. dollar, Ukraine, ukrainian, Yuan

Do you agree that western sanctions on Russia are undermining the dominance of the U.S. dollar? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





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Castles Made of Sand Dollars: SBF, FTX, and other Three Letter Agents – Bitcoin Magazine

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Castles Made of Sand Dollars: SBF, FTX, and other Three Letter Agents - Bitcoin Magazine



The story of Bitcoin has certainly had its fair share of nefarious characters, criminal activity, bad haircuts and worse wardrobes, and yet our anti-hero du jour has seemed to outdo them all. Sam Bankman-Fried, better known by the three letter acronym SBF, burst onto the scene at the peak of the 2017 bubble, founding Alameda Research that September, just four years after graduating from an internship into a full-time position at one of the world’s largest market makers, Jane Street Capital.

SBF is the son of Stanford Law professor and founder of left-wing super PAC Mind The Gap, Barbara Fried, and Stanford professor Joseph Bankman, an expert on tax shelter laws and government regulation. At the start of 2018, SBF had struck digital gold while taking advantage of the arbitrage opportunity presenting itself between a higher demand for bitcoin in the Asian market, colloquially known as the “kimchi premium”. By the end of the year, and after amassing a considerable fortune from this high-volume bitcoin/dollar spread, he officially moved to Hong Kong, formally founding the derivatives exchange FTX in the following spring.





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Kazakhstan Continues Bitcoin Mining Regulation – Bitcoin Magazine

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Kazakhstan Continues Bitcoin Mining Regulation - Bitcoin Magazine



Kazakhstan is moving forward with regulation that will further stifle its bitcoin mining industry.

The country’s federal parliamentary body has completed secondary approval of a bill “On Digital Assets in the Republic of Kazakhstan.” With a third approval, the legislation will introduce new licensing requirements for bitcoin miners based on their facility ownership and operational structure. It would also require that miners purchase their electricity from the energy provider Korem at market rates.

Previously, specific reporting and tax requirements were implemented, including registration of names, locations and quarterly reports to the government. These occurred as a result of the major influx of mining amidst energy shortages and protests, all while bitcoin miners fled China as a response to the government’s banning of bitcoin.

Kazakhstan’s close proximity to China and previously highly favorable energy access led to the large amounts of hash rate migrating to the country. Afterwards, Kazakhstan went as far as seizing up to $200 million in mining equipment who did not comply with regulation, and the country continues to try and absorb the benefits of the influx in bitcoin mining using legislation like this most recently approved bill.

Bitcoin Magazine previously reported on regulation in Kazakhstan, citing a report from the Russian media outlet Tass. In the report, Ekaterina Smyshlyaeva, a member of the Committee on Economic Reform and Regional Development of the Majilis (Kazakhstan’s federal parliamentary body) detailed the government’s intentions, describing how, “Kazakhstan was used as a raw material appendage of the blockchain industry. [Through] bills, we oblige miners to license in Kazakhstan, that is, to create legal entities and become full-fledged subjects of taxation.” 



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Paraguay Fails To Pass Bitcoin Mining Bill – Bitcoin Magazine

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Paraguay’s Bitcoin Bill Passes the Senate



  • The Paraguay legislature did not pass a bill that would have regulated cryptocurrency mining in the country.
  • The bill, originally passed in July of 2022, was subsequently vetoed by President Mario Abdo Benítez in August, which sent it back to the legislature.
  • If passed, the bill would have limited outsized charges levied against bitcoin miners for their energy usage.

According to a Coindesk report, “The industry has found itself in a fight with the local grid operator provider, Ande, and some members of the legislature who claim that the grid’s infrastructure cannot handle the excess load and that the industry doesn’t greatly benefit the local economy and society.”

Ande had requested that the Paraguayan government raise electricity tariffs by as much as 60% over the industry standard — and the bill would have capped these increases to 15%.

Paraguay has become a major location for bitcoin mining as a result of the country’s abundant power. The Itaipú dam, one of the largest in the world, has proven to be a boon of cheap energy, enabling a rush to absorb this value into the Bitcoin network via mining. If the country seeks to expand on this rush of investment into the energy infrastructure of the country, getting regulation correct is critical to not stifling that.

Industry players involved in Paraguay include Bitfarms, who has a 10MW facility based there, and Pow.re, who has operations totaling 12MW there.



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