PRViously on Crypto: EU bans high-value crypto services in Russia, Russians collectively hold $130B in crypto
EU bans the provision of high-value crypto services in Russia to seal ‘potential loopholes’
The European Union has prohibited Russia from providing high-value cryptocurrency services as part of its newest wave of sanctions in response to the country’s invasion of Ukraine.
The EU noted in a press statement that targeting crypto assets as part of its fifth package of sanctions against Russia attempts to narrow any loopholes. This comes after it was revealed that Russia might be looking to crypto-assets as a way to circumvent the west’s heavy financial restrictions.
“A prohibition on providing high-value crypto-asset services to Russia. This will contribute to closing potential loopholes<…>A prohibition on providing advice on trusts to wealthy Russians, making it more difficult for them to store their wealth in the EU,” as stated in a statement.
Additionally, the EU stated that the measures included a prohibition on deposits to cryptocurrency wallets. According to the EU’s council, more measures were imposed in response to Russia’s atrocities in Bucha.
Russians collectively hold $130B in crypto, Prime Minister says
According to reports, Russians own over $130 billion in bitcoin, but the government has yet to enact crypto legislation.
The Russian prime minister stated that Russians own billions of dollars worth of bitcoin, but the government has yet to adopt a legislative framework for the industry.
Russians collectively own more than ten trillion rubles ($130 billion) in cryptocurrencies such as Bitcoin (BTC), Prime Minister Mikhail Mishustin declared Thursday during the Russian government’s annual report presentation.
The prime minister did not specify the source of this figure, just adding that it is based on “different estimations.” He continued, “We are fully aware that over ten million young people have opened crypto wallets and transferred considerable sums of money totaling more than ten trillion rubles.”
If accurate, Mishustin’s current estimates of Russian crypto holdings are quite near to Russia’s gold hoard, which reportedly totaled $140 billion as of late March 2022. According to White House estimates, Russia’s gold reserves account for approximately 20% of the central bank’s total reserves.
The Russian government’s latest figures come months after the Bank of Russia announced plans to analyze the level of domestic cryptocurrency holdings last year. Russia’s central bank has since calculated that the country’s yearly cryptocurrency transactions are worth roughly $5 billion. Some estimates put Russia’s total cryptocurrency holdings at $214 billion earlier this year.
Despite the fact that Russians are rapidly investing in cryptocurrencies, the Russian government has been sluggish in adopting clear laws to oversee the booming cryptocurrency sector. Several government organizations are unable to agree on how to manage the business. The Russian Finance Ministry submitted a revised version of the Russian crypto law to the government on Friday, following comments from other ministries and authorities.
As previously reported, the Russian Central Bank has been a vocal opponent of crypto, with Bank of Russia Governor Elvira Nabiullina pressing the government to prohibit Bitcoin earlier this year.
Amid Russia’s ascension to the status of the world’s most sanctioned countries, a number of global leaders have raised the alarm about the rising narrative of Russia’s ability to escape sanctions through the usage of cryptocurrency. The European Union Council approved the fifth package of sanctions on Russia on Friday, including a ban on delivering “high-value crypto-asset services” to Russia. “This will contribute to addressing potential loopholes,” the council stated in an official statement.
Earlier this week, Ksenia Yudaeva, the Bank of Russia’s First Deputy Governor, reportedly stated that sanction evasion in Russia is “practically impossible” using crypto, particularly for major transactions. According to reports, the central bank repeated its position that cryptocurrencies such as Bitcoin are “in fact a financial pyramid scheme.”
Several prominent leaders in the bitcoin business are sure that Russians will never adopt cryptocurrencies to evade sanctions. Changpeng Zhao, the founder, and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, stated on Wednesday that Russians could not truly utilize cryptocurrencies to circumvent sanctions since cryptocurrency transactions are not anonymous. He stated as follows:
“Most transactions do need to go through a centralized exchange, any large transactions of value because the decentralized exchanges don’t have enough liquidity yet. […] So that’s a misconception that Bitcoin is anonymous. Bitcoin’s anonymous feature is very, very weak.”