Moscow is considering the possibility of using $300 billion in frozen sovereign assets to support Ukraine’s reconstruction as part of a potential settlement to end the war, three sources familiar with the matter told Reuters. However, Russia would demand that a portion of these funds be allocated to territories currently under its control.
The discussions follow the first direct talks between Russian and U.S. officials on February 18 in Saudi Arabia, with both President Vladimir Putin and former U.S. President Donald Trump expressing interest in further negotiations.
After Russia’s 2022 invasion of Ukraine, Western nations froze Russian central bank assets, including $300-$350 billion in bonds and reserves held in European and American financial institutions. While talks remain at an early stage, sources indicate that Russia could propose using a significant portion of these reserves for Ukraine’s recovery as part of a broader peace agreement.
Ukraine’s reconstruction is estimated to require at least $486 billion, according to the World Bank. The idea of Russia allowing the frozen assets to be used for rebuilding Ukraine has not been publicly reported before and may signal Moscow’s potential willingness to negotiate. However, Russia has previously labeled efforts to seize these funds as “theft.”
Key Russian conditions for ending the war include Ukraine withdrawing its forces from Russian-claimed territories and abandoning its NATO aspirations. Meanwhile, Ukraine demands a full Russian withdrawal and security guarantees from Western allies.
One proposed compromise would see up to two-thirds of the frozen assets allocated for Ukraine’s recovery, with the remaining portion directed toward Russian-controlled regions. Moscow would also seek accountability measures for fund allocation and contracts for reconstruction projects.
Despite ongoing discussions, the European Union and Western nations remain divided on how to handle Russia’s frozen reserves, with legal and economic implications complicating the process. European financial institutions, particularly in Germany and the European Central Bank, have expressed concerns that seizing sovereign reserves could undermine trust in international financial systems.
While Russia has maintained its stance against asset confiscation, some officials acknowledge that negotiating over these funds could be an option if Russian-held territories remain under Moscow’s control.
