Russian residents face several risks when holding cash in U.S. dollars. Among the most notable concerns are the threat of robbery by intruders and the possibility that American-printed currency earmarked for Russia could be restricted or blocked by foreign authorities, according to Dmitry Golubovsky, a financial analyst with Arguments and Facts.
In early 2023, official data showed that cash held by Russians reached a level not seen since 2018, underscoring how prominent cash usage remained even as digital payments grew. This reflects a broader trend where large cash balances coexist with extensive reliance on electronic banking and foreign currency holdings as part of residents’ financial strategies. Golubovsky points out two primary risks for those who hold dollars: direct physical theft and potential regulatory actions that could limit the circulation of dollars designated for Russia. The concern is not just about the cash itself but about the traceability and control that authorities may exercise over currency in circulation.
He notes that U.S. authorities maintain records tied to serial numbers on banknotes issued for foreign markets. Prior to the escalation of hostilities in Ukraine, dollars were widely moved into Russia through banking channels and air shipments. This historical pattern means regulators could, in theory, identify and curb the use of specific banknotes by serial number if they choose to do so, creating an added layer of risk for holders in the Russian market.
According to Golubovsky, before the conflict intensified, Russian banks placed orders with its suppliers in the United States and the corresponding cash was withdrawn from accounts and shipped by air. The implication is that counterparty banks and regulators are aware of the specific banknote series associated with particular institutions, which could enable targeted restrictions on those notes should circumstances warrant it.
Industry analysis has also looked at currency preferences among Russians, with savings in different currencies forming a notable facet of personal finance. Recent reporting from Izvestia, citing Finam analysts, indicates that the U.S. dollar ranked second in popularity as a savings instrument for Russians. The ruble remained the most preferred currency, while the Chinese yuan rounded out the top three. This mix highlights a continuing preference among households for diversification across currencies as a hedge against local economic risks and volatility in the ruble.
Overall, the dialogue around dollar holdings in Russia underscores a balance between perceived safety, access, and regulatory risk. Individuals and institutions may weigh the stability and universality of the dollar against the practical challenges of safeguarding high cash balances and the potential for regulatory changes that could impact liquidity or accessibility. The discussion remains relevant for policymakers and financial professionals who monitor cross-border currency flows, sanctions compliance, and the evolving landscape of currency risk in Russia and nearby markets. At the same time, it serves as a reminder for ordinary savers to consider a diversified approach to currency exposure and to stay informed about shifts in policy that could influence the value and usability of cash holdings. Attributions: Golubovsky commentary, official Russian statistics, Izvestia Finam analysis report.