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March 25, 2022updated 02 May 2022 11:42am

Russia-Ukraine crisis could accelerate digital currencies: BlackRock CEO

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict.


BlackRock chief executive Larry Fink observed that Russia’s ongoing military invasion of Ukraine could potentially accelerate digital currencies.

In an annual letter to shareholders, Fink noted that digital currencies are one of the ‘less discussed aspects of the war’ and that countries will be forced to re-evaluate their currency dependencies because of the war.

He wrote in the letter: “Even before the war, several governments were looking to play a more active role in digital currencies and define the regulatory frameworks under which they operate. The US central bank, for example, recently launched a study to examine the potential implications of a US digital dollar.”

According to Fink, a thoughtfully designed global digital payment system could drive the settlement of international transactions while minimising the risk of money laundering and corruption.

He further pointed out that digital currencies could also help in cutting the costs of cross-border payments, including in cases where expatriate workers send earnings back to their families.

BlackRock is studying digital currencies, stablecoins and the underlying technologies following an increased interest from its clients in digital asset space, Fink added.

Russia exposure

Recently, a report by Financial Times said that the $10tn asset management firm incurred a loss of $17bn on its funds exposed to Russian equities.

Fink stated in the letter that the firm ‘never had significant investments’ in the country for the vast majority of its portfolios.

Its Russia exposure is said to consist of investments made on behalf of clients seeking access to indexes and active strategies in which Russia is a component.

BlackRock suspended the purchase of any Russian securities in its active or index portfolios shortly after Russia’s attack on Ukraine.

Fink said: “Over the past few weeks, I’ve spoken to countless stakeholders, including our clients and employees, who are all looking to understand what could be done to prevent capital from being deployed to Russia.”

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