Confiscation, Sanctions and Retribution
The U.S. and its NATO allies in the E.U. have imposed unprecedented economic sanctions on Russia and its oligarchies, which have never been implemented before.
Throughout history, even nations directly at war with each other would continue to pay the debts they owed each other. Further, the sanctioning of individuals and their worldwide assets and property sets a precedent that is not altogether compatible with so-called ‘Western values’, which emphasize the rule of law, due process, and cherished human rights.
In 1854–56, during the Crimean War. Britain and France were at war with Russia. Yet throughout that war, the Russian government kept paying interest to British holders of its debt. The British government also kept paying its obligations to the Russian government.
But that was then, and this is now. The global monetary system has moved on apace with the advent of cryptocurrencies. Financial retribution and monetary hostilities can be expected [in the light of exclusion from SWIFT] to have a great deal more complexity and unintended consequences than any previous major conflicts.
The U.S., with its European and global allies, is not directly at war with Russia (not yet anyway). However, they’ve still imposed the most punitive economic sanctions in history, effectively exiling/detaching the Russian economy from the global economic system.
Russia, of course, will fight and/or circumvent the sanctions with its ally China and the governing CCP. Their global aspirations are similar. A New World Order by their design, not Americas and the West.
Russia supplies enormous amounts of essential rare earth metals, 16% of the world’s natural gas, and 11% of its oil [with Ukraine, 1/3 of the global wheat] and through its Gazprom energy provider could well terminate energy supplies to Europe if sanctions further intensify. Elsewhere with Mastercard, Visa and Amex suspending operations, China may introduce its Union Pay system to help Russian consumers.
President Volodymyr Zelensky has, since the conflict began, passed a law that provides the legislative framework for crypto platforms. Subsequently, donations estimated at $100 million have flooded in from across the globe to help fight against the Russian invasion.
KUNA is the crypto exchange that manages 60% of the ‘fund for Ukraine’ presided over by Michael Chobanian. Cryptocurrencies are part of Ukraine’s shadow economy.
Perversely, the conflict is forcing Governments to develop their understanding of Crypto and their regulation; even Joe Biden signed an Executive order last week seeking clarification on Crypto guidance, illustrating a willingness to comprehensively understand a new asset class.
Gold that Russia’s central bank held overseas is now obviously frozen.
However, it is estimated that it holds 2.3 million tons within Russia, with a value of $150 billion. This can be melted down and sold at some cost, avoiding sanctions. Between them, China and Russia have accumulated large gold reserves.
It’s not now beyond the realms of possibility that to protect themselves against any future U.S. dollar-based sanctions, payment for goods, commodities, energy, and services could be demanded in a new digital currency backed by gold.
The USA is destroying the value of the $ by its abuse of sanctions.
Longer-term, this must necessitate a move away from the almighty American dollar and its hegemony by those not in accord or agreement with American dominance and exceptionalism!!!!