Following the Russian invasion of Ukraine, the US authorities placed sanctions on the Russian Central Bank, which involved the effective confiscation of Russian FX reserves that were held at the New York Federal Reserve. The US authorities also prevented Russian entities from trading in the USD, which is the world’s primary medium of exchange. Any entities that try to break these sanctions are at risk of severe penalties. The sanctions had two primary impacts. First, they have effectively imposed capital controls on the Russian economy. This is a measure that is normally undertaken by domestic authorities, but this time it…

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