Russian Asset Seizure Erodes Dollar, Euro Trust, Moscow Minister Says

• Using Russia’s frozen assets is undermining Western currencies, Finance Minister Anton Siluanov said, per Bloomberg
• If the West targets the funds, Russia will respond in a similar manner, he said.
• On Tuesday, Treasury Secretary Janet Yellen argued the funds’ use is a “moral case.”

The potential seizure of Russia’s frozen assets is eroding global trust in key Western currencies, Russian Finance Minister Anton Siluanov told a state-run news service, per Bloomberg. 

“The Chinese are reducing their participation in American securities — this is a consequence of what is happening,” he originally said in an interview with RIA Novosti. “The reliability of the dollar and euro has been undermined.”

His comments were a response to ongoing Western deliberations about the $300 billion in overseas Russian assets, funds that were seized in retribution for Moscow’s 2022 invasion of Ukraine.

Alongside a broader wave of sanctions from the US and its allies, the freezing of Russian assets has long been a cited factor for a growing de-dollarization trend. That is, to avoid Russia’s fate, countries have diversified their reserves away from the US greenback, and have instead turned to alternatives such as gold.

In that same time, Russia’s frozen reserves have sat untouched, but leaders in Europe and the US are now voicing support to use them for Ukraine’s financial needs. Despite worries that this could undermine financial stability, the assets are considered a useful solution to waning international support for Kyiv.

Ideas have ranged from only using the taxes accrued on the funds, while others have pushed for seizing the assets as a whole.

On Tuesday, Treasury Secretary Janet Yellen issued an appeal to her Group of Seven counterparts to make use of the immobilized funds, noting that there is a “strong international law, economic and moral case for moving forward.”

The most decisive action so far was taken by the European Union, which this month adopted a law to set aside any windfall profits accumulated by the reserves.

Without specifying, Siluanov told RIA that Russia has its own frozen assets belonging to the West, and can respond symmetrically to any Western actions. In late 2022, Moscow froze funds in accounts belonging to non-residents from countries it deemed “unfriendly,” Bloomberg reported. As of then, these accounts held around $3 billion.

A Russia spokesperson has previously pushed back on a G7 debt scheme that would use the assets as collateral, noting that Moscow would respond with legal actions if this occurred.