Blockchain for Banking News

EU sanctions all Russian cryptocurrencies to block trade sanction busting

russia eu

Today the European Union announced its eighth package of sanctions  against Russia over its war with Ukraine. Previously it banned crypto-asset wallets of more than €10,000, but that is now extended to a blanket ban. It applies to wallets, accounts and custody services.

The Russian government has been exploring skirting sanctions by enabling local businesses to transact with foreign companies using cryptocurrencies. One of the options being considered is to use stablecoins pegged to gold and other commodities. Tokens backed by real world assets are referred to as Digital Financial Assets (DFAs) and are already legal but have to be approved by the central bank. Only a handful of DFAs have been approved to date.

The Central Bank of Russia, like many global central banks, has a dislike of cryptocurrencies. But apparently, even the central bank is willing to contemplate cryptocurrencies for limited cross border use. 

In September, the Russian Prime Minister, Mikhail Mishustin, decreed a 2022 deadline to clarify the use of digital financial assets “to contribute to the uninterrupted payment for the supply of goods from abroad and for export.” The same applies to cryptocurrency for international settlement.

Additionally, the central bank has accelerated its work on a central bank digital currency (CBDC) with pilots due to commence next year.

Image Copyright: fellowneko / 123rf