U.S. Treasury Secretary Janet Yellen has publicly backed the idea of liquidating some $300 billion in frozen Russian Central Bank assets and using them for Ukraine's long-term recovery, reports The Washington Post.
"It is necessary and urgent that our coalition find a way to release the value of these immobilized assets to support Ukraine's ongoing resistance and long-term recovery," Yellen said in a speech in Sao Paulo, Brazil at a meeting of G20 finance ministers and central bank governors.
"I believe there are strong international legal, economic and moral arguments for moving forward. This will be a decisive response to the unprecedented threat that Russia poses to global stability," she said.
The United States and its allies froze hundreds of billions of dollars in Russian foreign assets in response to Moscow's incursion into Ukraine. Those billions sit unused as the war continues into its third year and officials from many countries debate the legality of sending the money to Ukraine. More than two-thirds of the Russian central banks' immobilised funds are in the EU.
Using the assets to help Ukraine "will make clear that Russia cannot win by prolonging the war and will encourage it to come to the negotiating table for a just peace with Ukraine," Yellen said.
The idea of using Russia's frozen assets has been gaining traction lately as further allied funding for Ukraine has become increasingly uncertain and the U.S. Congress is at a stalemate over providing more support. But there are trade-offs, too, as weaponising global finance could damage the US dollar's position as the world's dominant currency.
Yellen said it was "extremely unlikely" that using the frozen funds would harm the dollar's position in the global economy, "especially given the uniqueness of the situation, in which Russia is brazenly violating international norms. Realistically, there are no alternatives to the dollar, the euro and the yen," Yellen said.
Earlier this month, the European Union passed a law earmarking windfall profits generated by the Russian central bank's frozen assets. Yellen called that "an action I fully endorse." /BGNES
