The European Union is preparing to impose a blanket ban on all cryptocurrency-related activities involving Russia in an attempt to ramp up sanctions on the country, the Financial Times reported. The goal appears to be to limit Russian purchases of goods used in the war in Ukraine.
A Blanket Ban to Prevent Leaks
According to a document seen by the publication, the proposal came from the European Commission, which suggested a blanket ban rather than picking off and banning copycat entities spun off from sanctioned firms.
“In order to ensure that sanctions achieve their intended effect, [the EU] prohibits engagement with any crypto asset service provider, or the use of any platform allowing the transfer and exchange of crypto assets, that is established in Russia,” the document cited by the publication noted.
Earlier, the United States sanctioned and cracked down on the Russian crypto exchange Garantex, which was the country’s largest at the time. Another Russian platform to face Western sanctions is the A7 payment platform and its associated rouble-backed stablecoin, A7A5.
Despite the sanctions, the stablecoin’s aggregate transaction volume crossed $100 billion, according to Elliptic. Meanwhile, the publication highlighted that A7 is offering cash access to Russian tourists abroad through its hubs in Dubai and Istanbul. It is also offering payment instruments to businesses, including transactions in China.
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Sanctions Are in Place, and So Is the War
The EU and the US began imposing sanctions on Russia-linked entities soon after Moscow sent troops across Ukraine’s borders in early 2022.
However, imposing new measures by the 27-member European bloc requires unanimous support, and the document shows that three members have raised doubts about the blanket crypto ban.
Europe is also considering the possibility of imposing a ban on certain dual-use goods to Kyrgyzstan, as companies there have sold prohibited goods, including machine tools and electronics used in weapons and drones, to sanctioned Russian entities.
“Imports of common high-priority items from the EU to Kyrgyzstan have grown almost 800 per cent since the war began, while exports from the country to Russia are 1,200 per cent higher,” the document added.
