EU banned the provision of high-value crypto-asset services to Russia in the latest round of sanctions

The European Union (EU) has banned the provision of high-value crypto-asset services to Russia in the latest round of sanctions following its invasion of Ukraine.

EU bans the provision of high-value crypto services in Russia to seal ‘potential loopholes’

In a press statement, under the fifth package of sanctions against Russia, the European Union stated that the targeting of crypto assets is aimed at sealing any loopholes. This comes after it emerged that Russia might be turning to crypto-assets as an alternative to defeating broad financial sanctions imposed by the West.

“A prohibition on providing high-value crypto-asset services to Russia. This will contribute to closing potential loopholes<…>A prohibition on providing advice on trusts to wealthy Russians, making it more difficult for them to store their wealth in the EU,” the statement read.

The EU further noted that the sanctions extend to banning deposits to crypto wallets. According to the EU council, additional sanctions were adopted following Russia’s atrocities in Bucha.

After the invasion, crypto exchanges based in the European Union were initially forced to impose sanctions that prohibited transactions from targeting individuals in Russia. Despite the directive, there are concerns that some loopholes persist after the admission of European Central Bank President Christine Lagarde.

Besides cryptocurrencies, the EU also prohibits the sale of banknotes and transferable securities such as shares in any of the official currencies of the EU member states to Russia and Belarus.

The latest sanctions confirm a complete ban on transactions for four Russian banks, including VTB, which has a 23% market share in the country’s banking sector.

Interestingly, despite EU concerns, Russian Prime Minister Mikhail Mishustin still insists that the use of cryptocurrencies as a means of settlement remains prohibited.

As reported by Finbold, Mishustin emphasized that the government fully supports the Central Bank’s position that cryptocurrencies cannot be used as a legal payment option in the country. It is worth mentioning that the central bank has pushed for a complete ban on cryptocurrencies.

With the acceleration of sanctions on Russia, the International Monetary Fund has warned of consequences for the common financial system. As reported by Finbold, the IMF notes that sanctions could boost the use of digital assets while also eroding the dollar’s supremacy.

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