French Finance Minister Bruno le Maireannounced that the European Union will prevent Russia from avoiding economic actions using cryptocurrencies. Le Maire’s comments drew attention to the fact that they were made at a time of intense debate on the subject.
Le Maire, who made a statement after the meeting of the European Union Finance Ministers, stated that the latest sanctions against Russia have disorganized the financial system and paralyzed the operations of the central bank. European leaders also agreed to increase financial aid to Ukraine.
“We have decided to work on complementary measures so that they do not circumvent our sanctions. Regarding the protection of our economies, we want close coordination at the European level, as with the Covid crisis.
-le Maire”
European union and the United States announced last week that they are imposing strict sanctions against Russian banks and Russian billionaires after Russia launched military operations in Ukraine. The most notable among these sanctions is the sanctions of selected Russian banks. SWIFT was removed from the transaction system, this removal from the system is expected to create a major problem in Russia’s access to the international financial system.
The United States had recently included digital currencies in Russian sanctions and warned exchanges not to allow blacklisted assets.
Russia’s central bank, on the other hand, increased interest rates drastically to respond quickly to these sanctions, and President Vladimir Putin announced restrictions on the amount of foreign currency allowed to be removed from the country.
The stringent sanctions have also seen several Western companies either exit Russia or block their services. But crypto exchanges have so far refused to block Russian citizens.
Sanctions Boost Interest in Crypto
After the sanctions against Russia, it was determined that many crypto assets, especially crypto assets such as Bitcoin and Tether, increased in the number of transactions made with ruble pairs. After these sanctions, the ruble depreciated against Bitcoin, especially the dollar. Citizens have likely started adopting crypto to avoid the depreciating ruble and gain access to global financial systems. As Ukrainian crypto trading volumes also skyrocketed during the occupation, the government began accepting donations through the media.
But while citizens have turned to crypto, experts are skeptical about whether Russia can use the tool to facilitate billion-dollar transactions. The Bitcoin Policy Institute recently published a report stating that Russians trying to sell commodities via crypto will increase market volatility and make it unsustainable as a source of income.
Sanctioned individuals, on the other hand, will have no way of converting their crypto into fiat currency without warning the regulators.