BlackRock’s Larry Fink has said that one of the growing implications of the Ukraine-Russia war is the need for an increase in the use of digital currencies to keep the world going towards sustainability in response to the tampered globalization, created by the ongoing war, that was created over the last three decades.
He stated in his letter to its shareholders that a less-discussed aspect of the Ukraine-Russia war is its potential impact on accelerating digital currencies, noting that the war will prompt more countries to re-evaluate their currency dependencies.
The implication of Russia’s Invasion of Ukraine
In the letter, he mentioned many of the obvious effects that Russia’s invasion of Ukraine has on countries, companies, and their clients, one being that central banks are weighing difficult decisions about how fast to raise rates. That they face a dilemma they haven’t faced in decades, which has been worsened by geopolitical conflict and the resulting energy shocks. Emphasizing that central banks must choose whether to live with higher inflation or slow economic activity and employment to lower inflation quickly.
The invasion has catalyzed nations and governments to come together to sever financial and business ties with Russia. United in their steadfast commitment to supporting the Ukrainian people, they launched an “economic war” against Russia. Governments across the world almost unanimously imposed sanctions, including taking the unprecedented step of barring the Russian central bank from deploying its hard currency reserves.
Larry Fink, Chairman, BlackRock Inc CEO.
He stated that even before the war, several governments were looking to play a more active role in digital currencies and define the regulatory frameworks under which they operate. Siting an example of the US central bank have recently launched a study to examine the potential implications of a US digital dollar.
He also confirmed with a solution that a global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption. Digital currencies can also help bring down costs of cross-border payments, for example when expatriate workers send earnings back to their families.
The company, as confirmed in his letter, is seeing increasing interest from its clients in Digital currencies.
“As we see increasing interest from our clients, BlackRock is studying digital currencies, stablecoins, and the underlying technologies to understand how they can help us serve our clients.”
Larry Fink, Chairman, BlackRock.
