Debate sparks over €180 billion in frozen Russian assets

Euroclear Ltd., the Belgian clearinghouse managing €180 billion in frozen Russian central bank assets, has raised serious concerns over the potential fallout if these assets are confiscated by the European Union.

Valerie Urbain, Euroclear’s CEO, stressed the need to address liabilities before any such move.

“We cannot be in the situation whereby the assets have been seized, but, in a couple of years, Russia comes and knocks at the door and says, ‘I want to recoup my securities,’ while the securities assets would have been gone,” she cautioned.

Urbain warned that confiscating assets without resolving liabilities could create a dangerous precedent, eroding trust in the global financial system and destabilising the euro’s reserve status.

“The trust that you have had for decades in the system, suddenly it’s been questioned,” she noted.

The European Union has so far used profits from Russia’s frozen assets to support aid for Ukraine, including a €50 billion loan package.

However, discussions about directly seizing these assets have gained attention amid concerns about declining U.S. support for Ukraine, especially if Donald Trump is re-elected.

Russia has strongly opposed the use of its frozen assets, labeling such actions as theft and a violation of international norms.

The Kremlin has hinted at retaliatory measures, including nationalizing Western-owned assets in Russia.

The broader implications of asset confiscation extend beyond geopolitics.

Urbain highlighted increased financial activity in Asian and Middle Eastern markets as stakeholders evaluate alternatives to the euro-centric system.

“If there is a confiscation of assets, everything is up in the air,” Urbain underscored the potential long-term risks, while Euroclear has not observed immediate changes in transaction volumes.