Europe Imposes Blanket Ban on All Crypto Services to Russian Entities
When Russia started their “special military operation” in Ukraine in February, Western powers responded in unison with harsh sanctions, and kicked Russia out of the SWIFT network.
Now, the European Union has announced that they are tightening sanctions against Russians by making it illegal for crypto service providers and exchanges to accept business from Russia.
Russia’s economy becomes more isolated
The EU has now imposed a series of sanctions against Russia, and thus far there have been eight batches of regulations that have imposed.
The goal of these sanctions has been to damage the Russian economy as much as possible so as to impair the war effort.
The most recent ban, which is intended to clamp down on some of the few ways that Russians have been able to remain financially included in the rest of the world, has now been restricted.
It follows earlier legislation that restricted crypto payments made to UK wallets to just 10,000 euros.
How successful will the sanctions be?
Attempts to legislate against the usage of crypto have been attempted many times in the past, and in almost every case has failed.
In 2021, the President of Nigeria was originally quite opposed to the proliferation of Bitcoin in the country, since Bitcoin was seen as a threat to the national currency.
However, in addition to coming to recognise the importance of his people having a solid foundation in a well-used currency with high liquidity that could not be diluted, he recognised the impossibility of legislating against it, and Bitcoin usage in Nigeria has since boomed.
Rather than completely prevent transactions between willing participants, it is far more likely that Russians will simply be driven to less regulated platforms and in many cases will opt for peer-to-peer alternatives such as Local Bitcoins.
Therefore, in all likelihood these sanctions will not be in place forever: over the short term the ban may be used as a tool to try and weaken the Russian regime and crush morale domestically, but over the long term the ban would also be extremely damaging for the European Union – particularly given that Russia’s huge natural resources mean that the country has a huge advantage when it comes to the Bitcoin mining industry.