The Russian Ministry of Finance has reaffirmed its stance on keeping cryptocurrencies out of the National Welfare Fund (NWF), citing their high volatility and unsuitability for sovereign reserves. Instead, the fund remains structured around gold and the Chinese yuan, according to Deputy Finance Minister Vladimir Kolychev.
No Changes to NWF Investment Structure
Speaking to journalists on March 4, Kolychev confirmed that the Ministry does not plan to alter the fund’s asset composition, responding bluntly to questions about potential diversification into digital assets:
“No. Gold and yuan.”
Currently, the NWF’s investment structure allows for:
- Up to 60% in yuan
- Up to 40% in gold
While the United States is exploring a crypto reserve under the Trump administration, Russia has no similar plans. Kolychev clarified that no discussions have taken place regarding a strategic crypto reserve in Russia.
Why Crypto Is Off the Table for NWF Investments
Kolychev explained that sovereign reserves must be highly liquid and stable, ensuring that assets can be sold quickly without drastic losses. Cryptocurrencies, in contrast, are prone to significant price swings:
“Our sale should not result in receiving 50 kopecks for a ruble. Crypto assets are highly volatile, and we have never considered them for the NWF.”
Russia’s investment strategy follows a conservative approach, accumulating 7-10% of GDP in liquid, low-risk assetsbefore venturing into higher-risk options. As of now, the NWF is far from that threshold, meaning riskier assets, including crypto, are not under consideration.
NWF’s Recovery and Future Outlook
The volume of the NWF has returned to its early 2024 level, reaching 11.88 trillion rubles. While this signals financial stability, it is still insufficient to justify riskier investments.
Kolychev suggested that once the fund grows, there could be room for more diverse assets, but he remains skeptical about crypto’s stability:
“When we reach that level, we can consider different assets, including crypto. But for now, the volatility remains unfavorable.”
Russia’s Stance on Crypto and Sovereign Reserves
While Russia has explored digital asset regulations and CBDC development, its stance on crypto as a reserve asset remains firm. Unlike countries exploring Bitcoin reserves, such as El Salvador, Russia’s government prioritizes stability and liquidity, making gold and yuan the preferred choices for its sovereign wealth strategy.
