- The ECB president has increased calls for crypto regulation approval.
- As fears persist that Russia may turn to crypto, Lagarde hopes to block them off.
- Despite speculation, several pundits believe that such a move by Russia is either unlikely or not foolproof.
According to reports, the president of the European Central Bank (ECB) has urged the EU to ratify crypto regulations. As sanctions against Russia pile up, fears persist that the nation might turn to crypto.
The Effectiveness Of Sanctions
Christine Lagarde, the president of the European Central Bank, has called on lawmakers in the European Union to speed up efforts to pass crypto regulation. The idea is that it would empower law enforcement, financial institutions, and even crypto firms to take active steps to make sure Russia does not sidestep economic sanctions.
Lagarde said, “Whenever there is a ban or prohibition or a mechanism in place to boycott or prohibit, there are always criminal ways that will try to circumvent the prohibition or the ban.” However, she adds, “It’s so critically important that MiCA is pushed through as quickly as possible, so we have a regulatory framework within which crypto assets can actually be caught in a regulatory framework.”
In response to Russia’s aggression against Ukraine, NATO allies have all placed sanctions on the energy giant in a bid to make Putin rethink his efforts in Ukraine. The French minister for foreign affairs, Jean-Yves Le Drian, said the goal is “asphyxiating Russia’s economy.” At the moment, aside from the EU, six countries, including the US, have placed sanctions on Russia targeting military supply, their banks, oil sector, and oligarchs.
In a bid to reign in regulations for digital assets on the continent, MiCA, which stands for “Markets in Crypto Assets,” was first proposed by Europe’s legislature in September of 2020. The vote on MiCA was to be carried out on Monday but due to concerns that certain parts of the legislation standing on their own could be misinterpreted as a ban on Bitcoin, the vote has been delayed. Spokesperson, Stefan Berger, said, “It is crucial for me that the MiCA report is not misinterpreted as a de facto Bitcoin ban.”
Will Russia Turn To Crypto?
As speculation rages about the possibility of cryptocurrencies like Bitcoin being used to undermine sanctions, the question of whether or not Russia will actually employ crypto arises. An associate at Seward & Kissel, Andrew Jacobson, had a conversation with CoinDesk to attempt to answer this very question.
Jacobson said that despite several headlines pointing to this alternative, he does not see it as a likely outcome. He noted that it was difficult for autocracies to adopt these decentralized digital assets. It was his belief that governments like those in Russia had no inclination to relinquish any power over their monetary systems.
Solidus Labs’ Chen Arad revealed that governments are becoming more capable of regulating the crypto market while Chainalysis’ Caroline Malcolm noted that wallets known to belong to sanctioned parties can be restricted by exchanges.