European Commission Boosts Effectiveness Of Economic Sanctions On Russia By Incorporating Cryptocurrency Bans

JAKARTA – To make the sanctions more effective, the European Union Commission has clarified that crypto assets will fall under additional sanctions targeted against Russia and Belarus. This is the European Union's latest response to the military conflict in Ukraine.

In a statement Wednesday, March 9, the European Commission said member states had agreed to amend the rules with the aim of ensuring "even more effectively that Russian sanctions are circumvented, including through Belarus."

The commission said crypto assets fall under the scope of “transferable securities,” and fall under this type of sanction. They added that loans and credits granted using crypto would not be allowed, as part of this financial restriction measure.

We are further tightening the net of sanctions responding to Russia's military aggression against Ukraine Listing 160 individuals: oligarchs, Russian Federation Council members Belarus banking sector Export of maritime navigation technology to Russia Adding crypto-assets

— Ursula von der Leyen (@vonderleyen) March 9, 2022

This expansion of sanctions follows the commission's decision to announce in February that it would remove several Russian banks from the SWIFT cross-border payments network. Those steps have yet to determine how they handled cryptocurrencies at the time.

The European Parliament Committee on Economic and Monetary Affairs is also preparing to hold a vote on the regulatory framework for crypto assets in the EU on March 14.

Both the United States and the European Union have signaled that they will see Russia potentially using digital currencies to evade sanctions that some have described as “economic warfare.”

On Wednesday, US President Joe Biden signed an executive order that would require government agencies to coordinate and consolidate policies on a national framework for cryptocurrencies as well as explore the potential rollout of central bank digital currencies. The order also mentions the risk of avoiding the three-time sanction.

In addition to the actions by lawmakers, private businesses from fast food chain McDonald's to major credit card companies, including Visa and Mastercard, have announced that they will either scale down operations in Russia and Belarus or completely stop operations in both countries. This move is in response to the situation in Ukraine.

Crypto exchange Binance also said Tuesday, March 8, that it will no longer be able to accept payments from the two major credit cards issued in Russia due to the company's decision to comply with sanctions.