European regulator plans to ban cryptocurrency transactions with Russia

The European Union is preparing new sanctions against Russia, which for the first time may completely ban the use of cryptocurrencies to circumvent restrictions. According to the Financial Times, citing an internal document of the European Commission, it is planned to ban any transactions with Russian crypto platforms and services, regardless of their scale or specialization.

Brussels decided not to limit itself to targeted sanctions against individual companies, as they are quickly replaced by new structures. Instead, a systemic ban is proposed to block the possibility of using crypto infrastructure to trade in goods used in the war against Ukraine.

Particular attention is being paid to platforms associated with the Russian exchange Garantex, which was subject to US sanctions in 2022. The new restrictions may also affect the A7 payment system and its ruble-pegged stablecoin A7A5. Despite the existing sanctions, in January, Elliptic reported that the transaction volume of this token exceeded $ 100 billion.

The European Commission also proposes to ban transactions with the digital ruble, which is backed by the Central Bank of Russia, and to impose sanctions on 20 banks. Separately, it is planned to restrict the export of dual-use goods to Kyrgyzstan, as some of them are resold to Russia for the production of weapons and drones.

All of these measures are to be included in the 20th EU sanctions package and will be the first application of the new rules to combat circumvention of restrictions. They require the unanimous support of all 27 member states. According to the Financial Times, three states have so far expressed doubts and requested additional explanations. The European Commission aims to approve the package by February 24, the anniversary of Russia’s full-scale military invasion of Ukraine.