Russia edges closer to first debt default since Bolshevik Revolution as US cuts off its ability to pay its creditors

Moscow is edging closer to defaulting on its national debt for the first time since the Bolshevik coup more than a century ago after the US cut off its ability to pay creditors today.

The Treasury Department said in a notification that it does not plan to renew the license that allowed Russia to keep paying its debtholders through American banks, making a Russian default all but inevitable.

Since the first rounds of sanctions, the Treasury Department has given banks a license to process any dollar-denominated bond payments from Russia. That window expires at midnight of May 25. 

The US dollar is the global reserve currency and the currency in which most international trades are denominated, giving the US enormous control and leverage over international finance as US banks must process those transactions.

At the same time, the EU has proposed new rules that would make it harder for Russian oligarchs to evade sanctions and open the way to confiscating their assets to help pay to rebuild Ukraine.