With the U.S. Treasury Blocking, the possibility of Russian default on its debt has been raised once more dollarMoscow, U.S. Banks.

On Monday, the Kremlin was unable to pay holders of its securities. sovereign debtWith more than $600million of dollars reserves with U.S. financial institution, it is designed to force Russia either to use more of its dollar reserve or accept a first default on debt in many decades.

After Russia invaded Ukraine, sanctions had already placed an end to all foreign currency reserves of the Central Bank of Russia at U.S. banks. However, the Treasury Department permitted Moscow to access those funds for coupon payment obligations to its dollar-denominated debt.

CNBC was informed Tuesday by a spokesperson for the U.S. Treasury that Russia is in recession due to skyrocketing inflation and shortages of essential goods.

According to the spokesperson, one of the more potent of 700+ U.S. sanctions was the CBR’s with an “unprecedented multilateral speed and coordination” that had “unprecedented impact, speed, or coordination.”

A bond payment in the amount of $552.4 million and a $84million coupon payment in a bond in the 2042 dollar range were due Monday. These payments came one day after it was revealed that Russian forces killed civilians in Kyiv.

Russia has until today to pay another debt payment. According to a spokesperson from the Treasury Department, any payments of dollars will be prohibited starting today by the U.S. Treasury.

Russia has to choose whether it wants to take its valuable dollars reserves or bring in more revenue. Or, default.

According to the spokesperson, the Russian President would be further affected by the dollar drawdown. Vladimir PutinThe Russian financial system will be more unstable as a result of the Russian war effort.

Russia has thus far avoided defaultingIt continues to repay its foreign currency debt in spite of Western sanctions that severely restricted the central bank’s ability to access foreign reserves. The U.S. Treasury Department previously stated that Russia was not prohibited from meeting its international debt obligations, at least for the time until May 25, when an exemption would be granted.

After the accusations of civilian murders, Europe and America are now planning more sanctions.

CNBC still hasn’t received any response from both the Russian defense ministry in London and Russian Embassy London.

Timothy Ash, a strategist for emerging markets at BlueBay Asset Management called the Treasury’s move a “logical next step.”

In a research note, he stated that Putin will need to consider whether or not he wishes to avoid defaulting on his external debt. This will have long-lasting negative effects for Russia’s economy.

It is unlikely that Putin will withdraw from Ukraine. But, it is difficult to imagine Russia not defaulting here unless it transports planes full of physical cash dollars and gold West. Even then, it’s impossible to envision any international bank offering settlement to bondholders in order to avoid default. It is not clear whether international bondholders will accept settlement.

Moscow’s default in servicing its debts would be Russia’s first sovereign default, since 1998 when it defaulted domestically. It also marks Russia’s first sovereign default on foreign currencies debts since 1918, the Bolshevik Revolution.

—CNBC’s Sam Meredith contributed to this article.