The US is considering blocking Russia's ability to pay US bondholders, a US administration official said, which could push Moscow to the brink of default.
So far, Russia has been able to make payments on international bonds despite Western sanctions that have made the payment process more difficult. The country has $40 billion worth of international bonds and made late payments on the bonds last month to avoid a default.
Russia did not default on its external debt after the 1917 revolution.
Now Russia is nearing a May 25 deadline for the expiration of a US license allowing it to make payments.
Bloomberg News previously reported that the Biden administration is willing to allow the exclusion to expire.
Bloomberg reported that the administration decided not to extend the sanctions relief in order to maintain financial pressure on Moscow.
Western sanctions prohibit transactions with the Russian Ministry of Finance, the central bank or the sovereign wealth fund.