Other Countries' Central Banks May Start Hiding Their Dollar Reserves, Warns Germany

The freezing of the Bank of Russia's reserves may encourage other countries' central banks to 'hide' their dollar reserves. This opinion was expressed by Jan Peter Krain, a professor at Goethe University in Frankfurt, in an interview with Wirtschafts Woche.

He suggested that now, following sanctions against Russia, anti-Western countries will consider whether to continue holding their assets in Western accounts.

“Their likely response is diversification—not only with respect to the reserve currencies they use but also in terms of where and how to hold them. This can be done secretly,” the expert stated.

“Central banks can do this by creating 'state-owned companies',” he added. Krain also believes that states will keep money in small portions within the private capital market, making it impossible to identify their ownership. This would allow them to maintain their investments in Western financial markets, he stated.

Additionally, the professor pointed out that the U.S. uses the dollar as a weapon in its conflict with the Russian Federation, which negatively impacts the dollar's status as the world's primary reserve currency.