EU will act so that cryptocurrencies do not allow to avoid sanctions on Russia

The European Union (EU) is considering adopting measures to prevent cryptocurrencies from being used to circumvent the economic sanctions imposed on Russia for its invasion of Ukraine after detecting an increase in transactions with these assets that could indicate that they are being used for this purpose.

“We have decided to work on additional measures to further strengthen the effectiveness of these sanctions and prevent any circumvention. In particular, we will take provisions on cryptocurrencies, which must not be used to circumvent the financial sanctions decided by the EU.”, announced the French Minister of Economy and Finance, Bruno Le Maire.

The French minister, whose country chairs the Council of the EU this semester, spoke in this way at a press conference after the extraordinary telematic meeting of Ministers of Economy and Finance of the Twenty-seven convened to analyze the impact of the sanctions on Moscow on the economy of the Union.

Le Maire said that at the moment it is not possible to anticipate what specific measures will be adopted, but indicated that there is a “great consensus among the Member States” on the need to prevent crypto assets from being used to circumvent sanctions and that the Twenty-seven will evaluate possible actions based on a report from the European Central Bank (ECB).

“We have been informed that there is an increase in the volume of transactions with cryptocurrencies and crypto assets, which could indicate attempts to evade sanctions through crypto assets, so it is something that we will evaluate and, if necessary, propose measures against it.”, added the vice-president of the European Commission Valdis Dombrovskis.

Since the beginning of the Russian invasion last Thursday, the EU has adopted several rounds of sanctions aimed at undermining the foundation of the Russian economy, with measures affecting its financial and banking sector, transport or trade flows, and include the freezing of assets in community territory of the Russian president himself, Vladimir Putin, and the circle of oligarchs closest to him, among some 700 individuals and entities sanctioned.

The economy ministers of the Twenty-seven consider that the sanctions are already proving their effectiveness with the collapse of the ruble, the “disorganization” from the Russian financial system by excluding seven of its banks from the Swift system or the “paralysis” from its central bank, Le Maire explained.

But they recognize at the same time that these will have an economic cost for the EU itself, above all due to the high inflation that would derive from the increase in energy prices. The EU calculates that a 10% increase in prices would translate into an additional 0.2 points of inflation in the bloc, Le Maire said.

For this reason, the countries will study with the European Commission to adopt measures in terms of State aid or energy policy to support, as a priority, the companies with the greatest use of gas, the most fragile or with the greatest international competition, added the French minister.

cryptocurrencies

The Commission and the countries will also work on measures to prevent cryptocurrencies from being used to dodge European sanctions, based on a report from the European Central Bank (ECB).

“We have been informed that there is an increase in the volume of transactions with cryptocurrencies and crypto assets, which could indicate attempts to evade sanctions through crypto assets, so it is something that we will evaluate and, if necessary, propose measures against it.Dombrovskis said.