Russia: new EU sanctions on crypto

Today, 6 October 2022, the European Union approved a new set of sanctions against Russia for its war against Ukraine. This is the EU’s eighth sanctions package aimed at eating into all Russian revenues, now including those from crypto.

The new sanctions package reads:

“Extends the list of restricted items which might contribute to the Russian Federation’s military and technological enhancement or to the development of its defense and security sector.”

Crypto in Russia amid sanctions and freedom

Cryptocurrencies have thus now become part of the economic and political measures against Russia for waging and wanting to continue the war against Ukraine. 

Until this new decision by the European Union, sanctions were limited to affecting payments by Russian citizens made in cryptocurrencies to European wallets, but only up to €10,000 in amount. However, according to today’s EU announcement, the ban now involves any type of transaction made in crypto, of any amount and including those not destined for Europe.

This is what the EU statement reads:

“The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet.”

Crypto helps against sanctions

Cryptocurrencies have helped Russia ever since these sanctions were imposed on the country. Even as late as early September, the Russian Central Bank and the country’s Ministry of Finance had come up with a bill to use stablecoins to make cross-border payments.

The bill was aimed at helping Russian citizens gain access to wallets to exchange cryptocurrencies. Deputy Finance Minister Alexey Moiseyev had announced that Russia was working with several friendly countries to create clearing platforms to make cross-border stablecoin payments. 

At this point, given the tightening of sanctions, the project will probably come to nothing, at least for the time being

Russia was so optimistic about crypto, seen precisely as a method of circumventing sanctions, that in late September the country even wanted to legalize mining, an activity that until now had been prohibited.

In late August, the country had in fact declared itself crypto-friendly, and Russia’s Prime Minister Mikhail Mishustin had stated how cryptocurrencies were necessary for foreign payments.

Is Russia becoming a crypto-free country?

As recently as yesterday, the Ministry of Finance of the Russian Federation had declared that it would allow any production center in the country to use Bitcoin and other cryptocurrencies for international trade.

In fact, because of the war with Ukraine, Russia immediately received heavy sanctions, which led the world’s largest country to suffer a huge economic damage, and that is why cryptocurrencies – at least so far – had become a way to solve these problems.