Sanctions against the Russian Federation are hitting hard on the Russian nation and its businesses, financial- and payment systems, and citizens alike. More and more nations and institutions are lining up to impose sanctions, and it seems as if deeper and wider sanctions are coming.

Russia has been on a mission to de-risk its dependence on the U.S. dollar used in the country’s foreign trade, decreasing its holdings of dollars and looking to Chinese yuan, euro, and gold. However, there are no signs Russia might be using cryptocurrencies.

As a result, Russia has one of the largest gold reserves in the world, and most of it is deposited inside Russia. It may be the last straw for the Russian economy to cling to. Russia holds around $132 billion in gold reserves.

As a measure to cut this last significant straw, a bipartisan bill is being introduced to Congress, as reported by Axios. The bill introduced by Senators Angus King (I-Maine), John Cornyn (R-Texas), Bill Hagerty (R-Tenn.), and Maggie Hassan (D-N.H) would target Russia’s ability to sell its gold reserves. The bill would apply secondary sanctions to any American entities knowingly transacting with or transporting gold from Russia’s central bank holdings, or selling gold physically or electronically in Russia.

The goal of the bipartisan bill is to include the legislation in the general spending bill that lawmakers hope to pass by Friday.

“Russia’s massive gold supply is one of the few remaining assets that Putin can use to keep his country’s economy from falling even further. By sanctioning these reserves, we can further isolate Russia from the world’s economy and increase the difficulty of Putin’s increasingly-costly military campaign,” Senator Angus King said in a statement.

“Russia has taken a page out of Venezuela’s book by exploiting a loophole in current sanctions that allows them to launder money through the purchase and sale of gold,” Senator Cornyn said.

“The U.S. and our allies must be steadfast in standing up to Russian aggression and ensure that we block any escape hatch Putin has in getting around the full weight of our sanctions,” said Senator Hassan.

In parallel to the introduction of this bill, the U.S. is looking to ban oil imports from Russia, even without the participation of its European allies, who are highly dependent on Russian energy, especially natural gas.

Germany, the biggest buyer of Russian oil, has rejected plans to ban energy imports. Germany is accelerating its plans to expand its use of alternative energy sources but cannot halt imports of Russian energy overnight, German Chancellor Olaf Scholz said on Monday. 

The United States relies far less on Russian crude and products, but a ban would help drive prices up and pinch U.S. consumers already seeing increasing prices at the gas pump.

The market price of oil has soared to its highest level since 2008, partly due to delays in the potential return of Iranian crude oil to global markets and as the United States and European allies consider banning Russian imports.

President Joe Biden held a video conference call with the leaders of France, Germany, and the United Kingdom on Monday as his administration continues to seek their support for a ban on Russian oil imports.

The White House is also negotiating with U.S. congressional leaders who are working on fast-tracking legislation that would ban Russian imports, a move that is forcing the administration to work on an expedited timeline, a source told Reuters, speaking on condition of anonymity.

A senior U.S. official, also speaking on condition of anonymity, told Reuters that no final decision has been made but “it is likely just the U.S if it happens.”

It remains to see how these measures will impact market prices of bitcoin, other cryptocurrencies, or even gold if the measures are implemented. It goes beyond saying that if the gold bill is enacted, and shown to be effective, large quantities of gold will be ousted from the global market for the time being. All else being equal, less supply usually means higher prices.

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