Russia’s Putin questions the need for dollar forex reserves, touts bitcoin

MOSCOW (Reuters) – Russian President Vladimir Putin on Wednesday questioned the need to hold state reserves in foreign currencies since they could easily be confiscated for political reasons, saying that domestic investment of such reserves was more attractive.

Western countries froze about $300 billion of Russian reserves, accumulated from windfall energy revenues, at the start of the Ukraine war in 2022. Discussions are ongoing among G7 countries on how these funds could be used to support Ukraine.

“A legitimate question: why accumulate reserves if they can be lost so easily?” Putin said in remarks to an investment conference. He suggested that investment of state savings into infrastructure, logistics, science and education was more reliable than holding them in foreign assets.

Putin said the current U.S. administration was undermining the role of the U.S dollar as the reserve currency in the global economy by using it for political purposes, forcing many countries to turn to alternative assets, including cryptocurrencies.

“For example, bitcoin, who can prohibit it? No one,” Putin said. He added that development of new payment technologies was inevitable, due to their lower costs and reliability.