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Malaysian Prime Minister Anwar Ibrahim and Russian President Vladimir Putin sat down in Kazan this week to talk about something that would have seemed fringe a decade ago: cutting the US dollar out of their trade relationship entirely.
The two leaders discussed using the Malaysian ringgit and Russian ruble for bilateral trade during the ASEAN-Russia Commemorative Summit on June 17-18. The conversation centered on mechanisms that would allow the two countries to settle transactions directly in their own currencies, bypassing the greenback that has dominated international commerce since Bretton Woods.
A modest trade relationship with outsized ambitions
Bilateral trade volume sat at approximately $3.2B in 2024, which is a rounding error compared to either country’s total trade activity.
The discussions covered energy cooperation, with an emphasis on stable long-term oil supplies from Russia to Malaysia. Technology sectors including AI and pharmaceuticals were also on the agenda, along with targeted growth areas like halal products and palm oil.
Anwar and Putin have engaged in multiple prior meetings, reflecting a diplomatic relationship that’s been quietly deepening. No formal agreements on specific currency mechanisms emerged from the summit. The talks were more framework than blueprint.
The de-dollarization playbook keeps growing
Malaysia isn’t limiting these conversations to Russia. The country has engaged in similar local-currency trade discussions with India, signaling a broader strategic pivot away from dollar dependence.
Russia knows this firsthand. Since the imposition of international sanctions following its invasion of Ukraine, Moscow has been aggressively seeking alternatives to the USD and the SWIFT messaging system that underpins most international bank transfers. The country has turned to China’s yuan, India’s rupee, and now potentially Malaysia’s ringgit as settlement currencies for trade.
For Malaysia, the calculus is different but related. The country isn’t under sanctions, but it’s navigating a global trade environment reshaped by US tariffs and increasing economic fragmentation. Diversifying currency exposure is a hedge against uncertainty.
What this means for crypto and digital assets
This particular meeting was squarely focused on traditional fiat currency mechanisms. There was no mention of Bitcoin, stablecoins, central bank digital currencies, or any blockchain-based settlement infrastructure.
Each new bilateral currency arrangement creates its own liquidity challenges. The ringgit-ruble pair is not exactly a deep market. Finding enough liquidity to settle meaningful trade volumes without a dominant intermediary currency is genuinely hard. This is precisely where digital assets, particularly stablecoins pegged to major currencies, could eventually find a role as bridge instruments.
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