I'm still trying to wrap my head around all that's involved, but it's a very big deal. People have a better understanding, please chime in.
Ursula von der Leyen @vonderleyen
Second, we will paralyse the assets of Russia’s central bank.
This will freeze its transactions.
And it will make it impossible for the Central Bank to liquidate its assets.
5:13 PM · Feb 26, 2022
WSJ, no paywall:
U.S. Weighing New Sanctions on Russia’s Central Bank
https://archive.ph/GELkP
In the wake of Russia’s invasion of Crimea in 2014, the Obama administration banned U.S. firms from buying debt from the central bank as part of its broader financial pressure campaign against Moscow. Those sanctions fueled a depreciation of the ruble and exposed the vulnerability of Russia’s dollar-denominated assets.
The Treasury Department on Tuesday expanded those sanctions to include central bank debt traded in the secondary markets, where intermediary institutions sell central bank bonds. [snip]
Among its options to expand sanctions on the Russian central bank, the administration could ban any dollar transactions—and allies might complement with similar action against euro, pound and yen trading. Such a step could hobble the central bank’s ability to sell its foreign currency reserves. Another option could be a full blacklisting that freezes any assets held in U.S. jurisdictions—and other countries’ jurisdictions where allies join Washington in the move—and prohibit any transactions. That could hit not only the bank’s currency-stabilization operations but also the transactions critical for the country’s international trade.
Ari Redbord, a former senior Treasury Department official now at the blockchain analytics firm TRM Labs, said imposing such blocking sanctions—along with so-called secondary sanctions that blacklist any foreign banks, businesses or individuals caught transacting with a target—“is a death sentence.” The threat of losing access to the U.S., with the world’s most important currency and deepest financial markets, would undercut Russian efforts to evade the sanctions even by redirecting financial transactions through a willing Chinese bank.
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