An ally of President Vladimir Putin warned Europe on Tuesday that Russia has already drafted legislation to retaliate if nearly $300 billion of Russian assets were seized by the West and used to help Ukraine.
After President Vladimir Putin sent troops into Ukraine in 2022, the United States and its allies prohibited transactions with Russia’s central bank and finance ministry, blocking around $300 billion of sovereign Russian assets in the West.
Top officials in the United States want to seize the assets to help support Ukraine, though some bankers and European officials are worried that simply taking the assets would create a dangerous precedent.
The U.S. House of Representatives passed legislation on Saturday including a bill with a provision that would allow the confiscation of Russian sovereign assets, though the lion’s share of the assets are in Europe.
I’m not sure exactly what Russia would do to bring hurt, but what I am sure of is that people will think twice about having dollar-denominated assets or euro-denominated assets because they could be frozen and confiscated at any time for any reason, so they will be more likely to hold gold and other real money. This would be a very, very bad move in the long term. Maybe not short term.