The sanctions may force the Central Bank to accelerate the adoption of the digital ruble

​Economists believe that e-RUB can help Russia move away from US dollar

02.03.2022 - 09:30

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1 min

What’s new? The analysts from the Institute of International Finance (IIF) argue that Russia’s digital ruble can limit the impact of the US dollar on the economy and soften the blow of sanctions. However, the economists expect the country’s economy to plummet and output to shrink. The IIF report says that more than half of Russia’s foreign exchange reserves are held in countries that have imposed sanctions and frozen assets, limiting the Central Bank’s ability to support the ruble.

IIF’s report

What else does the report say? According to the IIF, Russia has been in the process of de-dollarization since 2014. By 2021, the Central Bank has reduced dollar reserves from 43% to 16%. The sanctions measures may force Russia to abandon the dollar altogether and accelerate the implementation of e-RUB. The IIF’s analyst stated:

“Similar to how Covid accelerated a lot of digital economy and stay-at-work adoption, this aggression by Russia and the West’s response in terms of sanctions and freezing of reserves, might accelerate the adoption of alternative payment channels and self-custodial stores of value.”

Author:

Vasiliy Smirnov Vasiliy Smirnov

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