The war between Russia and Ukraine could speed up the adoption of digital currencies as a means of international settlement. This view was voiced by BlackRock CEO Larry Fink, according to Reuters.
\n\n
In a letter to shareholders, the head of the world’s largest asset manager said the events would push countries to rethink their currency dependencies. Due to client interest, BlackRock is examining digital assets and stablecoins, Fink added.
\n\n
\”A thoughtfully designed global digital payment system could improve the settlement processes for international transactions while at the same time reducing the risks of money laundering and corruption,\” he noted.
\n\n
The geopolitical crisis, he says, marks the end of globalization trends that have prevailed over the last 30 years, according to Fink.
\n\n
Fink said that since the invasion began, the asset manager with assets under management of about $10 trillion halted purchases of any Russian securities for index portfolios.
\n\n
\”In recent weeks I have spoken with countless stakeholders, including clients and staff, who want to understand what can be done to prevent capital deployment in Russia. We consider this, by definition, our fiduciary duty,\” added Fink.
\n\n
According to BlackRock, the volume of client commitments in Russia fell from $18 billion to less than $1 billion over the course of the war.
\n\n
Fink expects negative consequences of the war for global supply chains, which will fuel inflationary pressures. This will push central banks to tighten monetary policy and roll back pandemic-era measures.
\n\n
Regulators will have to face a dilemma they have not confronted in decades — choosing to fight inflation or restrain economic activity, the BlackRock chief stressed.
\n\n
He noted that sanctions imposed on Moscow have driven up energy prices. However, Fink believes that this will place energy security among global priorities and hasten the transition to renewable sources.
\n\n
Russia, for its part, has entertained selling gas and other resources for bitcoin.
\n\n
In July 2021, Larry Fink noted minimal client interest in digital assets. By February 2022, media learned of the company’s intention to launch a cryptocurrency trading service.