Putin: US Itself Killing Dollar as Reserve Currency by Weaponizing Sanctions, Fueling Inflation

“It seems to me that the United States is making a very big mistake by using the dollar as a sanctions instrument... by preventing payment in dollars for the sanctioned products,” Putin told CNBC’s Hadley Gamble on Wednesday, after a panel at the Russian Energy Week.

Countries facing US sanctions, like Russia, “have no other choice, we are simply forced to switch to settlements in other currencies,” he added. Gamble had asked about the possibility of using cryptocurrencies such as Bitcoin to sell oil and gas, something Putin welcomed in principle but said it was “too early,” citing crypto’s volatility.

Russia is still accepting dollars in energy trade, and – for now – has no plans to ditch the US currency entirely, Putin noted, but “if the policy of the American authorities continues… then we will not have to do anything, the US will itself undermine confidence in the dollar.”

Even US allies were reducing their dollar holdings and reliance on US currency in mutual trade, the Russian leader pointed out. Not just because the dollar has been weaponized for sanctions, but also because Washington is devaluing the currency at home, by printing money and raising the national debt.

“For the first time, probably in history, inflation in the United States is growing at a rate that has not happened for a long time,” Putin told CNBC.

The US is basically “sawing off the branch they’re sitting on,” Putin said, “by undermining the dollar’s dominance as the global reserve currency for the sake of short-term political gain at home, but harming their strategic economic interests” in the long term.