Yellen urging world leaders to ‘unlock’ frozen Russian Central Bank assets and send them to Ukraine

WASHINGTON — Treasury Secretary Janet Yellen is offering her strongest public support yet for the idea of ​​liquidating some $300 billion in frozen assets from Russia’s Central Bank and using them for Ukraine’s long-term reconstruction.

“It is necessary and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction,” Yellen said in a speech delivered on Tuesday prepared in Sao Paulo, Brazil, where the Group This week, twenty finance ministers and central bank governors are meeting.

“I believe there are strong international legal, economic and moral arguments for moving forward. This would be a decisive response to Russia’s unprecedented threat to global stability,” she said.

The United States and its allies have frozen hundreds of billions of dollars in Russian foreign assets in retaliation for Moscow’s invasion of Ukraine. Those billions remain unused as the war continues, now in its third year, as officials from multiple countries have debated the legality of sending the money to Ukraine. More than two-thirds of immobilized Russian central bank funds are in the EU.

Using the funds to help Ukraine “would make it clear that Russia cannot win by prolonging the war and would push the country to come to the table to negotiate a just peace with Ukraine,” Yellen said.

The idea of ​​using Russia’s frozen assets has gained momentum recently as continued allied financing for Ukraine becomes more uncertain and the US Congress is at a stalemate over whether to provide more aid. But there are tradeoffs, as the weaponization of global finance could damage the US dollar’s position as the world’s dominant currency.

Earlier this month, the European Union passed a law setting aside unexpected profits from frozen assets of Russia’s central banks. Yellen calls that “an action that I fully support.”

Brazil kicked off its presidency of the Group of 20 countries this month, while finance ministers met this week. Topics of discussion include combating poverty, climate change and the wars in the Gaza Strip and Ukraine. G20 leaders will meet in Rio on November 18 and 19.