Economics/Class Relations

Sanctions on Russia could eat away at the dollar’s global dominance and boost the use of crypto, IMF says

Insider

The sanctions placed on Russia over its invasion of Ukraine could erode the dominance of the US dollar and spur the adoption of digital currencies, according to a top IMF official.

Stringent Western financial sanctions have frozen much of Russia’s foreign assets and hit its ability to trade. While that has underlined the dollar’s power as the dominant global reserve currency, it has also been a wake-up call for countries about relying on it too heavily.

Gita Gopinath, first deputy managing director at the IMF, said there are signs some countries are already renegotiating the currency they are paid in for international trade.

“The dollar would remain the major global currency even in that landscape, but fragmentation at a smaller level is certainly quite possible,” Gopinath told the Financial Times in an interview published Thursday.

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