The European Union (EU) in collaboration with relevant international partners has handed out strategic prohibitions on the Russian government in 8 key areas including cryptocurrency. These eight-package sanctions on Russia were rolled out on October 6 as a means to penalize Russia for its illegal war and aggressiveness against Ukraine.
The sanctions placed on Russia are under the following eight headings namely, an extension of restrictions to the oblasts of Kherson and Zaporizhzhia, new export restrictions, implementing the G7 oil price cap, new import restrictions, restrictions on state-owned enterprises, additional listings, deterring sanctions circumvention, and financial, IT consultancy and other business services.
Per the update, the eight-package sanctions aim to reduce the nation's revenue and also deprive the Russian military of acquiring more war equipment and weapons. Part of the announcement read:
This package introduces new EU import bans worth €7 billion to curb Russia's revenues, as well as export restrictions, which will further deprive the Kremlin's military and industrial complex of key components and technologies and Russia's economy of European services and expertise. The sanctions also deprive the Russian army and its suppliers from further specific goods and equipment needed to wage its war on Ukrainian territory. The package also lays the basis for the required legal framework to implement the oil price cap envisaged by the G7.
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Regarding the financial, IT consultancy, and other business services, the European Union commission wrote, “the existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet (previously up to €10,000 was allowed).”
With this sanction rolled out by the European Union council, Russians are therefore restricted from accessing the crypto market while their storage of crypto assets has been affected grossly too. More so, Russians will no longer be able to create accounts on European crypto companies, carry out trading activities or hold crypto assets of any amount on European-related wallets. In an earlier ban, the EU allowed Russians to hold assets worth at most €10,000 but it is a complete ban now.
Nevertheless, some experts believe that not all crypto exchanges will ban Russian companies while also citing that it is not a death sentence for the Russians as they could always utilize decentralized exchanges to execute crypto trading and other transactions. This is possible because DEXes do not require KYC before anyone can trade assets or enjoy other crypto services.
Meanwhile, these crypto sanctions on Russians come just a few weeks after the Deputy Minister of Finance of Russia announced that the Central Bank and Ministry of Finance of Russia signed a bill to legalize cross-border payments/ settlements in crypto. Cross-border payments with fiats have always been accompanied by myriad setbacks but with the crypto method, individuals to execute cross-border payments seamlessly and with lower charges.
Russia's crypto-friendliness hasn't always been firm but of late, the nation has been more welcoming to crypto in order to allow its citizens to benefit from the financial technology. It is said that this sanction from the European Union will have a significant impact on Russians.
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