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EBC: Crypto regulation will stop Putin

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  • Authorities are concerned that Russia would exploit digital assets to circumvent the sanctions placed on them.
  • According to some analysts, Russia may be aiming to become the world’s second-largest mining hub.

As conflict and crypto grow linked and moral quandaries emerge, European Central Bank President Christine Lagarde has advocated for swift ratification of crypto legislation. 

Authorities are concerned that Russia would exploit digital assets to circumvent the sanctions placed on them.

Europe relies on Russia for 40% of its natural gas supplies, putting potential Swift sanctions on hold. Governments and groups seeking to exert pressure on Russia will adhere to whatever additional restrictions they may impose.

Many think that the present suggested steps would be insufficient since Putin’s policy most certainly anticipated this scenario. If authorities consider cryptocurrency as a tool to help Russian initiatives succeed, regulatory frameworks may be implemented more quickly.

Bitcoin: Putin’s way out of sanctions

Experts think that Russian organizations will take every means possible to mitigate the consequences of the sanctions and that digital assets, which are out of reach for banks, might become one of their instruments.

Markets in Crypto-Assets (MiCA) is a proposed rule under EU law that the parliament has been working on since 2020, although its implementation may take longer than Lagarde anticipated. It has yet to be properly introduced to parliamentarians, authorized by them, and then agreed upon by EU member states.

Furthermore, the EU parliament has been encouraged to evaluate the possible environmental effect of blockchain technology. Many campaigners wanted to put pressure on the EU to restrict crypto mining, however, EU politician Stefan Berger claimed that MiCA’s legislative package is not designed to resolve technological or energy-related issues.

The crypto market is still in its infancy, and these occurrences might easily be twisted into a narrative that benefits the positions.

ALSO READ – Crypto trading volume on Coinbase surges by over 8.5 folds

Are Sanctions Sufficient?

The United States, the United Kingdom, the European Union,  Taiwan, Japan, Canada, and New Zealand have all implemented sanctions against Russia for a sudden attack on Ukraine. Military exports, banks, and oil refineries are the primary targets of the country’s bans.

The goal, as French Foreign Minister Jean-Yves Le Drian stated, is to “seriously injure Russia’s economy,” but are present efforts sufficient?

“President Putin’s choice to escalate the military confrontation into a war implies a readiness to suffer short-term economic hardship in exchange for achieving long-term geopolitical goals,” said UBS Chief Investment Officer Mark Haefele.

Many analysts are concerned that using cryptocurrency to avoid sanctions is part of Russia’s goal. Although blockchain technology is transparent, crypto-powered markets operating on the dark web, as well as other money-laundering strategies, are being revealed.

According to some analysts, Russia may be aiming to become the world’s second-largest mining hub. The government recently backed down from a proposed crypto prohibition in favor of regulation, with Putin emphasizing the positives of mining operations.

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