Sanctions against Russia and Belarus have been replaced by cryptocurrencies, according to the European Commission

In reaction to the current crisis in Ukraine, the European Commission has stated that crypto assets will be subject to further penalties directed at Russia and Belarus.

Sanctions against Russia and Belarus have been replaced by cryptocurrencies, according to the European Commission

The European Commission said in a statement on Wednesday that member states had decided to alter the legislation in order to ensure "even more effectively that Russian sanctions cannot be bypassed, particularly through Belarus." According to the commission, crypto assets fall under the category of "transferable securities," therefore loans and credits created using crypto will be prohibited as part of these financial restrictions.


The penalties were expanded after the European Commission announced in February that it would suspend numerous Russian banks from the SWIFT cross-border payments network, but did not specify how cryptocurrencies would be handled at the time. On Monday, the Economic and Monetary Affairs Committee of the European Parliament will vote on a legal framework for crypto assets in the European Union.


Both the US and the EU have signaled that they are looking into the prospect of Russia adopting digital currency to avoid sanctions that have been dubbed "economic warfare" by some. On Wednesday, US President Joe Biden signed an executive order directing government agencies to coordinate and consolidate policy on cryptocurrencies into a national framework, as well as investigate the possibility of the central bank launching its own digital currency; the order appeared three times the risks of evading sanctions.


In response to the situation with Ukraine, private corporations have indicated that they will limit or totally suspend their operations in Russia and Belarus, ranging from fast-food chain McDonald's to major credit card operating companies such as Visa and Mastercard. Binance, a cryptocurrency exchange, also said on Tuesday that it would no longer accept payments from two major Russian credit cards.

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