The Dollar and Its Domestic Enemies

by Peter C. Earle
The American Institute for Economic Research

Upping the ante following the initial weaponization of the dollar in 2022, the United States and a number of allied nations have agreed in principle to begin distributing profits on seized Russian assets to Ukraine. Interest payments on securities in which hundreds of billions of dollars worth of Russian foreign exchange reserves were invested, including US, European, and other sovereign bonds, would thus be transferred into a trust account accessible to the Ukrainian government. The US assertion of this undertaking was codified as the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act, signed into law by President Biden on April 24, 2024.

It is another in a series of unprecedented actions not only intensifying economic pressure on Russia but also signaling a shift in the economic dimension of current geopolitical conflicts. And it raises questions as to whether the entirety of those seized assets might be turned over to Kyiv should their reportedly declining war effort continue to weaken.

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