The International Monetary Fund says that the sanctions against Russia following its aggression in Ukraine could weaken the US dollar and spur the adoption of cryptocurrencies.
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The institution’s deputy managing director, Gita Gopinath, says that the sanctions could cause the emergence of smaller currency blocs based on trans-regional trades.
The executive adds that increasing the use of cryptocurrencies will increase the diversification of the reserves assets with the central banks.
Gopinath says that the dollar fragmentation will be inevitable, as witnessed recently in some countries renegotiating the currencies to get paid in.
The Kremlin has been seeking ways to cut its dependence on the US dollar since its annexation of Crimea in 2014, with the recent war agenda speeding the process.
Countries accumulate reserves in the currencies they trade with the rest of the globe, showing a slow pace in moving to other forms like cryptocurrencies.