Russia’s aim to offset the dollar’s global dominance impacts the world of crypto

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  • The dollar still maintains its dominance with a margin, with 60 per cent of foreign exchange reserves supported by central banks held in dollars. 
  • “We are for the use of Chinese Yuan in settlements between Russia and countries of Asia, Africa”. – President Vladimir Putin
  • In the interest of having money that exists outside a traditional power, Bitcoin and other cryptocurrencies provide a viable alternative to international trade.

On March 21, 2023, Russian President Vladimir Putin called out for the use of the Chinese Yuan in place of the dollar for international trade between them and countries of Asia, Africa and Latin America.

Already two-thirds of the trade turnover between our countries is carried out in Rubles and Yuan. We are for the use of the Chinese Yuan in settlements between Russia and the countries of Asia, Africa and Latin America…. I am confident that these forms of settlement in Yuan will develop between Russian partners and our counterparts in third countries.

The announcement comes days after the ICC issued an arrest warrant for Mr Putin over alleged war crimes. The ICC stated that the Russian President oversaw abducting of Ukrainian children in the ongoing Russian- Ukrainian war. This move has not been taken kindly by the Russian government.

President Joe Biden, among other world leaders in the European Union, has come out to support the Judgement by ICC, stating that Russia was converting to an “outcast state”.

Russia is perpetually seeking to destabilize the US dollar as a benchmark currency for value. Many have interpreted these moves as a looming War of the Titans among the world superpowers, inviting China into the battleground.

Read: Binance tours every country in Africa in search for crypto dominance

Russia-China alliance to dethrone US dollar

Russia started shifting its commitment towards the Chinese Yuan following the Western sanctions imposed on it early last year. The latest move sets the tone to deepen the political and economic ties between the two superpowers.

Russia-China alliance to dethrone the US dollar
Russia-China alliance to dethrone the US dollar

China’s President, Xi Jinping, recently visited Moscow, signing over 13 economic agreements on March 21, 2023. The “peace visit” visit included agreements around scientific cooperation and joint production of television programs.

In late March last year, Russia gave China the option of paying for Russian oil in Rubles, which neutralized the effects of the western sanctions. The former Soviet Union negotiated with India on the possibility of a rupee-ruble payment scheme for oil products. To hit back, they said that all unfriendly nations to Russia would have to trade for their oil in Rubles. Most countries in NATO and the EU need Russian fossil fuels, propelling the ruble trading margin by a milestone.

Countries have attempted to cut dependence on the dollar, which has dominated the financial ecosystem since the end of World War II. The countries pushing for the move include India, Argentina, Middle Eastern and South East Asia, Brazil, and South Africa. However, the dollar still maintains its dominance with a margin, with 60 per cent of foreign exchange reserves supported by central banks held in dollars. In 2000, the figure stood at 70 per cent.

There appears to be an uprising against the US dollar, a major currency in the crypto world.  The web3 ecosystem will respond significantly to countries shifting allegiance away from the currency.

The effect of Russia’s move to stablecoins.

Stablecoins will cease to be stable if the dollar loses its dominance. If Russia convinces their trading partners to embrace the Chinese Yuan, the dollar will destabilize. The store of value in cryptocurrency, usually in stablecoins, will scare investors away from the market.

Effects of De-dollarization on cryptocurrency

The United States has maintained their hard stance on cryptocurrency. In a report from the office of the President this March, the US stated that crypto-assets do not offer widespread economic benefits. They continue to say they are largely speculative and are not an effective alternative to fiat currency.

On the other hand, Russian Central Bank has opened up on the possibility to legalize bitcoin in the country. Russia is at a point where it is a necessity for them to be free from US-led sanctions. This is because they thrive under the US dollar.

The need to have money outside any traditional power shifts focus to Bitcoin to provide viable alternatives to international trade. The Russian Chamber of Commerce hinted at accepting bitcoin into its financial system to settle trade with African countries.

Even as the Russian-Ukrainian war comes to an end, the de-dollarization matrix has already been activated. Moreover, it does appear reversible. It will not be surprising to see bitcoin and other cryptocurrencies substituting the dollar in international trade.

Read: Russia takes a step to legalizing crypto


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I am a tech, business, and investment news reporter covering Africa. Most of what is good in Africa is obscured by preconceptions, yet there is still a lot of good going on. Technology is what is driving the continent and this is my passion. For Africa, I share the stories that are important to Africans.