March 23, 2023

President Of ECB Seeks Crypto Regulation To Stop Russia From Evading Sanctions

Amidst the ongoing Russia-Ukraine crisis, several countries with the European Union inclusive have imposed heavy sanctions on Russia for its repeated airstrike on the sovereign nation. The President of ECB (European Central Bank), Christine Lagarde, has called for swift cryptocurrency regulation to prevent Russia from bypassing economic sanctions by using crypto. 

The European Union Sanctions Russia

As crypto usage grows throughout the world, one of the consequences is that its usage will affect global events in the national community. In the most recent scenarios, the present turmoil which involves Ukraine and Russia has resurrected debate over the necessity for crypto legislation.

Russia has attacked Ukraine in the past days for a variety of reasons, including its continued desire to be a part of NATO. Several countries, notably the European Union, have placed serious economic penalties on Russia in reaction to the war, which many have widely condemned. 

However, if Russia can dodge the sanctions by using cryptocurrency, these restrictions will not have the consequences everyone imagined. This likelihood has prompted Lagarde to call on lawmakers to endorse a cryptocurrency regulatory structure.

Lagarde made this statement yesterday in a response to a reporter’s query about Russia possibly utilizing virtual currencies to escape some of these sanctions. She noted that all sanctions placed on Russia by European legislators will be implemented by the ECB.

Lagarde Urges European Lawmakers To Speeden Regulations On Cryptocurrencies

Lagarde acknowledged that digital assets may be used to bypass any limits put on the country, and has asked policymakers to reform the present cryptocurrency regulatory system.

“When there is a prohibition in place, there are always illegal methods that will be used to bypass the restriction,” Lagarde added.

She went on to say that MiCA (Markets in Crypto Assets) must be made as fast as possible to ensure a legal process can be established under which cryptocurrency may be captured. MiCA is a set of regulations that encourages invention while also protecting investors and maximizing the potential of virtual currency.

The proposal was first presented to the EC in 2020 and the European Council embraced it in 2021. The European Parliament was expected to cast a vote on the proposal on the 28th of February, but it was delayed after Stefan Berge mentioned that the vote might be misconstrued as the abolition of cryptocurrency mining.

It is not clear if the sanctions would cause Russia to pull back but that might be the outcome the European Union is expecting.

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