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Both states and ordinary citizens around the world will find it tempting to maintain control over their money in light of the sanctions imposed on Russia. According to Pantera Capital CEO Dan Morehead, countries can start building their own foreign exchange reserves in bitcoin (BTC).
About this, the CEO and Chief Investment Officer of Pantera Capital wrote in a recent newsletter:
Countries may soon start moving to bitcoin as currency/cloud reserves. The ability to keep your own foreign exchange reserves will become very attractive to many countries and individuals.
He added that bitcoin is attractive to ordinary citizens because they want to “protect themselves from the financial consequences of their government/dictator’s decisions.”
Morehead added that recent Western sanctions against Russia have already proven that foreign exchange reserves held in fiat money controlled by other countries are not as safe as previously thought.
The realization came after the Central Bank of Russia was cut off from most of its $630 billion foreign exchange reserves.
This caused a fall in the value of the Russian ruble, which, in turn, forced the central bank to raise its key rate to 20%. Morehead also added that the decision “should bring down the housing market.”
In addition, the shares of large Russian companies traded abroad have collapsed heavily, while the domestic Russian stock market is simply closed.
News broke Tuesday that a bipartisan group of US senators will introduce a bill aimed at barring Russia from selling even the physical gold it holds as part of its reserves.
The bill would apply so-called “secondary sanctions” to US entities that transact in or transport gold from the Russian central bank’s reserves, as well as to entities that facilitate the physical or electronic sale of gold in Russia.
The proposed initiative is to be included in the general spending bill, which is expected to be passed this Friday.
Russia ranks fifth in the world in terms of gold reserves after the US, Germany, Italy and France. According to the World Gold Council, the Russian central bank holds 2,301 tons of the yellow metal.
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