Topic
Precious metals bulls will be happy to hear that Russia has declared silver to be a strategic financial asset that it plans to aggressively acquire, which will pull yet another lever increasing the demand for silver.
The silver market gained yet another major bullish catalyst with Russia’s official announcement that it plans to add substantial amounts of silver to its financial reserves. Russia’s central bank has, like that of China and several other nations, been a big buyer of gold for many years. Along the way, it’s also added reserves in the form of platinum and palladium. However, up until now, silver was not – officially anyway – on Russia’s list of planned precious metals purchases.
But that all changed just a week or so ago, when the draft of Russia’s Federal Budget for the new year was found to specifically include a plan to acquire a large supply of silver to bolster the country’s reserve assets. The budget laid out Russia’s goals of continuing to increase the percentage of its financial reserves that are held in the form of precious metals. So, along with buying large quantities of silver, Russia will also continue a concerted effort to acquire more gold, platinum, and palladium.
This silver move by Russia comes at a time when its primary economic trading partner, China, is already loading up all the silver it can find that’s for sale. China’s massive hunger for silver is being fed primarily through three pipelines:
As far as I know, Russia hasn’t yet pursued China’s ultra-aggressive silver acquisition strategy of buying unrefined silver direct from miners. It does, however, have the other two options outlined above open to it. How much silver Russia is acquiring through precious metals trading exchanges is undetermined. In terms of domestic mining production, Russia is a significant silver producer, although a bit down the list from China in top silver producing countries. It currently ranks 7th in world silver production, behind other major producers such as Peru, Chile, and Bolivia.
Annual silver mining production in Russia is pegged at around 41 million ounces. The two top silver producing countries, Mexico and China, officially report annual production of around 213 million ounces and 112 million ounces, respectively. Still, Russia’s 41 million ounces a year is substantial. It outpaces US annual silver production by nearly 10 million ounces, and Australia silver mining by about five million ounces per year.
The formal announcement by Russia that it intends to increase its reserves by acquiring significant amounts of silver is a major one, because it is the only country, thus far, that has made such a formal declaration. China and India are also making significant moves to add huge amounts of silver to their reserves (India massively increased its purchases of silver in 2023 – buying hundreds of millions of ounces), but their central banks have not issued such a formal policy statement of their intentions to load up on silver…they’re just doing it.
Russia’s silver move is just another logical step in its campaign to strengthen its financial house in the aftermath of US financial sanctions that outright robbed the Russians of $300 million in assets. Since then, Putin and his financial advisors have plotted a well thought out path of eliminating Russian exposure to the US dollar and setting up trade agreements with China and other BRICS nations designed to bypass the SWIFT banking system, the vehicle for international trade that is essentially controlled by the US.
A major part of that path has been Russia’s drive to amass precious metals such as gold and silver in its financial reserves. The Russian Finance Ministry has earmarked $51 billion rubles for the purchase of precious metals and gemstones in 2025. In addition, the Ministry stated its intention to make similar levels of precious metals purchases in 2026 and 2027.
According to an article in The Jerusalem Post, Russia’s announcement of an organized plan to acquire substantial silver reserves “itself signals a potential shift in the global perception of silver as a strategic asset”. Precious metals market analysts such as Andy Schectman have raised the question of why the US and other countries have not designated silver as a “strategic asset”, given its extensive use in military applications.
(A Gold Vault in Hong Kong)
Gold has long been acknowledged as a safe haven monetary asset, one that nations have traditionally maintained as at least a part of their total reserve assets. Silver, however, has, over the past 50 to 100 years, lost some favor as a strategic financial asset and store of value. It has come to be viewed more as an industrial metal, one with extremely widespread applications. In recent years, a large portion of the annual demand for silver has come from the push for “green energy”. Silver is a major component in the photovoltaic cells used in solar panels. There is also an ever-increasing number of healthcare applications for silver.
Nonetheless, as more and more nations have sought to make precious metals a larger component of their financial reserves, and with growing talk about a possible return to the gold standard, gold’s little sister, silver, is regaining acceptance as one of the two foundational forms of “real money”.
Of course, it’s entirely possible that forward-looking nations such as China and Russia are eyeing silver as both a key monetary asset and as an essential strategic industrial asset. Either way, the desire to amass stores of billions of ounces of silver appears to be growing. One driving factor in the push to acquire silver is the ongoing annual supply deficit. According to the Silver Institute, 2024 will mark the third year in a row when the total demand for silver – currently estimated at approximately 1,220 million ounces – will outstrip annual silver production – estimated around 1,000 million ounces – by more than 20%.
The ongoing supply shortfall, coupled with the dwindling vault holdings at major precious metals trading exchanges, is making silver look like a very undervalued asset. It’s looking that way to both individual and institutional investors, and to countries that consider silver to be an essential commodity that any industrialized nation must have in vast quantities.
(I hope that Russia can keep all its financial policy moves straight, because, frankly, I’m having a bit of trouble myself in trying to keep up with all of them. In addition to everything discussed here, there’s also the talk of a return to the gold standard, via a gold-backed ruble, yuan, or BRICS currency.)
In addition to the declaration of its intentions to start stacking up silver, Russia’s central bank has also announced that it will immediately begin implementing a plan to introduce a central bank digital currency (CBDC) form of its currency, the Russian ruble. The plan is set to be executed in phases over the next three years, will full implementation scheduled to happen by mid-2027.
Digital rubles are scheduled to be available for the public to use by July of 2025. According to the press release from the Bank of Russia, Russia’s central bank, as of July 1st, 2025, all major banks in Russia will be required to offer their customers the opportunity to open digital ruble accounts and to “conduct transactions with digital rubles”, including the ability to transfer funds using digital rubles and to receive payments in digital currency form.
The complete rollout of the new digital Russian currency will occur in accord with a series of deadlines set for businesses to begin accepting the new CBDC, as follows:
The central bank made a point of stating that businesses are free to begin using digital rubles immediately following the CBDC’s large-scale introduction – as soon as they have the necessary financial infrastructure. That is, they don’t have to wait until the scheduled deadlines to start doing digital ruble transactions.
The Bank of Russia’s press release noted that, “Individuals and companies will be able to choose on their own which of the ruble forms to use”, the current, traditional form or the new CBDC version.
According to the press release, “Payments for purchases with digital rubles will be conducted using a universal QR code based on the National Payment Card System.” (I have no idea what the National Payment Card System of Russia is, but I assume that Russians are familiar with it.)
Russia won’t be alone in moving toward the creation and implementation of a CBDC. The European Central Bank (ECB) is in the midst of a two-year “preparation phase” to introduce its own CBDC, a process that began in 2023. Jamaica and the Bahamas are among a number of nations rolling out test programs for using a CBDC. Russia’s primary trading partner, China, recently launched a pilot program using digital yuan for cross-border payments.
The Bank for International Settlements (BIS) reports that more than half of the world’s central banks are currently engaged in CBDC test programs or in developing a CBDC version of their currency to introduce.
In other words, it pretty much looks like just a matter of time (and not much time at that) before CBDCs are introduced and implemented on a global scale…and that raises some major concerns with many individuals who value financial privacy.
CBDC’s are a digital form of currency that, like privately issued cryptocurrencies, can be held in a digital wallet and used for financial transactions - making or receiving payments. The key difference between a digital currency that’s issued by a nation’s central bank (that’s the “CB” in “CBDC”) and a cryptocurrency such as Ethereum is that the value of the CBDC is set and controlled by the government that issues it – while the value of Ethereum and other cryptos is set by market demand.
The introduction of CBDCs raises a major red flag in the area of financial privacy. The drive toward launching CBDCs is, according to many, fueled by the desire of governments to obtain greater power over their citizenry. Basically, governments don’t like cash and financial assets such as gold and silver because they can’t control the use of them. Cash money or real money gold and silver can currently be held and used anonymously. If I buy something from you using cash or gold, there’s not necessarily any record of the transaction. Well, Uncle Sam doesn’t like that. He wants to make sure that he can tax every possible financial transaction. He also likes having all the political power that he can get his grimy little hands on.
Government-issued CBDCs are seen by many as representing the end of all financial privacy. The implementation of CBDCs would give the government the ability to monitor every single financial move that any one of us makes. Not only would this significantly increase the government’s ability to expand tax collection – it would also, theoretically anyway, give the government ultimate and total control over what anyone of us does with our money. For example, let’s say the government doesn’t like people owning guns. Well, with a CBDC in place, the government that issues that CBDC could simply punch in a little line of computer code that blocks the CBDC from being used to purchase a gun.
Evidence of governments seizing such power is readily available. China launched a digital yuan test program in 2020. As reported in a Bloomberg article, “The PBOC has…indicated that it could put limits on the sizes of some transactions or…require an appointment to make large ones.” The author of the article went on to note that some people feared that the Chinese government might link the digital currency to its social credit system, which grants extra privileges to citizens with exemplary behavior (i.e., behavior supporting the government and its policies), while denying citizens who exhibit behavior the government deems undesirable access to certain social services.
Governments, and organizations such as the World Economic Forum (WEF) and the World Bank, commonly tout proposed CBDCs as offering people more freedom and convenience in conducting financial transactions. However, many people fear that CBDCs will simply offer governments the easy ability to monitor and control their citizenry on a previously unprecedented scale.
In its announcement of the CBDC ruble, the Russian central bank made a point of saying that the purpose of the digital currency was to expand people’s options for conducting financial transactions, and that people would be free to choose whether to use the traditional cash form of the ruble or the new digital form. But one can’t help but wonder how long it might be before the Russian government removed all that freedom in an instant – as simply as making an announcement that, as of a specified date, the CBDC form of the ruble would be the only legitimate, usable currency.
It would be an extremely sad irony if cryptocurrency – which owes no small part of its widespread acceptance to the financial anonymity it offers – ultimately became the mechanism of massively increased governmental control and virtual eradication of financial and personal freedom.
Russia's declaration of its intention to amass substantial silver reserves could have a significant long-term impact on the silver supply-demand equation and, thereby, on silver prices. That possibility becomes more probable if other nations decide to take a cue from Russia’s new silver policy and follow suit. Jon Little of The Silver Academy is quoted as recently saying, “As other countries potentially follow Russia's lead, we could witness an unprecedented setup for explosive growth in silver prices.”
All of this is occurring against the backdrop of an important BRICS summit meeting being held in Russia, and the general ongoing move toward de-dollarization, dethroning the US dollar as the world’s major reserve currency. The BRICS nations and other emerging market economies in Eurasia and the Asia-Pacific region are seriously looking at alternatives to the current global financial system of fiat currencies that’s led by the US dollar. Among the most widely held possible alternatives is a new gold-or-other-commodity-backed currency unit.
In any event, there’s little doubt that, as central banks all across the globe look to shore up their financial reserves with gold and silver, silver will likely become a more important and prominent asset in the global economic landscape and in the financial systems of nations.
Russia’s immediate plan to start using a CBDC version of the ruble should perhaps sound a warning bell regarding just how close the universal introduction of CBDCs may be. Investors who cherish the financial privacy and freedom that owning physical gold and silver provide may soon find that such assets offer the only financial freedom and independence that’s left to be had.
Contact us here at True Gold Republic for help with amassing your own personal precious metals fortune.
Download De-Dollarization Guide Now
Sources:
https://www.jpost.com/business-and-innovation/precious-metals/article-823167
https://substack.com/home/post/p-150502224?source=queue
https://www.silverinstitute.org/silver-supply-demand/
https://substack.com/home/post/p-150043754
https://cbr.ru/eng/press/event/?id=20992
https://substack.com/home/post/p-150043325
Latest
.png)
