Russia: ECB President Calls for Crypto Regulation to Prevent Sanction Evasion

As crypto adoption continues to rise globally, the implication of this is that its use gets to shape global affairs in the comity of states. 

In the latest of such scenarios, the ongoing global crisis involving Russia has led to new discussions about the need to impose crypto regulation. 

Russia has over the last few days invaded Ukraine for various reasons, including its ongoing attempt to join NATO. 

In response to this invasion, which has been condemned globally, several nations including the European Union have imposed severe economic sanctions on Russia. 

However, these sanctions might not have the far-reaching effects on the country as expected because the Russian government could possibly use crypto assets to evade these sanctions.

This possibility has led the President of the European Central Bank (ECB), Christine Lagarde, to urge lawmakers to approve a regulatory framework on crypto. 

Lagarde made this call while responding to a question from a reporter on Russia potentially using crypto to evade some of these measures at an informal meeting of economics and finance ministers on Friday. 

She stated the fact that the ECB would implement any sanction imposed on Russia by the European lawmakers to the latter. 

Digital assets a scapegoat from sanctions?

However, the ECB president conceded that digital assets can be used to circumvent any restrictions imposed on the country and thus urged lawmakers to improve on the current crypto regulatory framework.

“Whenever there is a ban or prohibition or a mechanism in place to boycott or prohibit, there are always criminal ways that will try to circumvent the prohibition or the ban,” said Lagarde. 

She further explained that it is critically important that Markets in Crypto Assets (MiCA) be pushed through as quickly as possible so that there can be a regulatory framework within which crypto assets can actually be caught.

The MiCA is a regulatory framework that supports innovation and draws on the potential of crypto-assets in a way that preserves financial stability and protects investors.

It was first introduced to the European Commission in September 2020 and was adopted by the European Council in November 2021, the proposal was scheduled for a vote to be implemented by the European Parliament on Monday but has been postponed as rapporteur Stefan Berge stated that the vote could be misinterpreted to mean a ban on proof-of-work crypto mining.

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