American multinational investment management corporation BlackRock CEO Larry Fink has stated the economic and financial implications of the Ukraine-Russia crisis is making a strong case for digital currencies to act as the tool for settlements of international transactions in the future.
The ongoing Russian invasion of Ukraine led to an assortment of economic sanctions on the Russian economy from the US and other western countries.
Reuters reported the executive addressing shareholders in a letter that explained that the war could coerce countries to reassess their dependency on other currencies and economies, eventually making way for a global digital payment network.
The crisis has crushed the will of countries to continue to cooperate with globalization forces that have been at work for over three decades, Fink added.
Fink’s observation regarding the digital currency market is not isolated. Russia is asking countries that buy oil and gas from the country to shift to a SWIFT-alternative while India is developing a direct INR payment gateway. This has also meant an increased focus on a global digital currency payments network. There are also talks of The Clearing House collaborating with Wells Fargo to develop a SWIFT alternative.
Blackrock is studying cryptocurrencies and stable coins due to increased clientele interest, the CEO explained:
"A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.”
The stance of the asset manager’s CEO marks a sharp shift from his comments last year, where he pointed out that it was too early to predict whether cryptocurrencies are just a speculative trading tool.
Fink further explained that access to the global capital market is a “privilege, not a right”. BlackRock has reduced its total client exposure to Russia to less than $1 billion earlier this month from $18 billion before the crisis intensified.