Russia is considering a remarkable turn in its financial strategy. According to an internal Kremlin document seen by Bloomberg, there is a proposal to return to the dollar system as part of a broader economic deal with Donald Trump’s government.
That would mark a break with years of attempts by Moscow to become less dependent on the American currency.
The document outlines how Russia and the United States can cooperate economically following a possible peace deal on Ukraine. Central to this is a return to dollar transactions, in exchange for closer energy and raw materials cooperation.
Back to the dollar: break with China?
Since the invasion of Ukraine in 2022, Russia has actively worked to reduce its dependence on the dollar. Heavy sanctions from the US and allies largely cut Moscow off from the international payments system. In response, Russia shifted trade to alternative currencies, especially the Chinese yuan, and stepped up cooperation with Beijing and countries such as India.
A return to the dollar system would therefore be a striking change in direction. It essentially means reconnecting with the US-dominated financial system. At the same time, it would give Trump a diplomatic victory because it could weaken the economic ties between Russia and China.
However, Western officials familiar with the document’s contents say it is unlikely that President Vladimir Putin will ultimately strike a deal that goes against China’s interests. Since the sanctions, Beijing has been a crucial trading partner and supplier of essential components for the Russian economy.
Energy, raw materials and billion-dollar interests
The proposal contains seven points in which Russian and American interests could coincide, according to the Kremlin. This includes joint investments in natural gas, offshore oil and critical raw materials. There would also be room for compensation for American companies that previously suffered losses in Russia.
It is striking that the document focuses on cooperation on fossil fuels, at the expense of green energy. This is in line with Trump’s previous criticism of wind energy and climate policy.
According to the memorandum, a return to dollar transactions would help Russia strengthen its foreign exchange market and limit fluctuations in its balance of payments. For the US, it would further strengthen the dollar’s position as a world reserve currency and potentially reduce global trade imbalances.
The US government has already proposed gradually easing sanctions on Russia as part of a peace deal. That is a necessary first step before Russia can trade fully in dollars again.
Ukrainian President Volodymyr Zelenskiy previously stated that Moscow and Washington are discussing extensive bilateral economic agreements in parallel with the peace talks. He called the Russian proposal the “Dmitriev Package,” referring to Kremlin negotiator Kirill Dmitriev, who also heads Russia’s sovereign wealth fund.
It is unclear whether the plans are actually on the table in Washington. There was no response from the Kremlin. What is certain: if Russia really returns to the dollar, it could radically change the global financial playing field.
Source: https://newsbit.nl/rusland-wil-terug-naar-de-dollar-in-opvallend-voorstel-aan-trump/
