Gita Gopinath says sanctions on Russia will boost crypto, reduce dollar dominance

Gita Gopinath, the Deputy Managing Director and former Chief Economist of IMF said that the sanctions placed on Russia in light of the ongoing war would reduce the dollar dominance and promote other currencies like crypto.

The top IMF official, in a recent interview with Financial Times, said, “Unprecedented financial sanctions imposed on Russia after its Ukraine invasion are gradually diluting the US dollar’s dominance, which might fragment the international monetary system,” further adding “Sanctions could encourage the emergence of small currency blocs based on trade between separate groups of countries.”

The deputy managing director of IMF also said that the war would also spur the adoption of digital finance, from cryptocurrencies to stablecoins and central bank digital currencies.

She said that this would lead to the promotion of cryptocurrencies but mentioned that a  “comprehensive, consistent, and coordinated” plan for capitalizing on the benefits of cryptocurrencies is still the need of the hour.

Gopinath further reasoned that the escalating conflict between Russia and Ukraine has cleared the path for the disintegration of the global financial system.

Also Read: Maharashtra's Gadchiroli to issue caste certificates via blockchain platform Polygon

Also Read: Crypto crime: Pune police recovers over Rs 84 cr worth of Bitcoins