The G7 is preparing regulations to prevent Russian people and organizations from using Bitcoin and other cryptocurrencies. The United States has already issued its first regulation to sanction Russia due to the attacks on Ukraine.
The United States and the European Union (EU) seek to regulate Bitcoin and other cryptocurrencies to prevent Moscow from using them to its benefit. Their objective is to block the access of the Russian government to the platforms related to the industry.
The idea of regulating cryptocurrencies during the conflict between Russia and Ukraine gains traction in the US and Europe. Jerome Powell, the chairman of the Federal Reserve (Fed), recently addressed the issue in the US Congress.
Senators Elizabeth Warner, Mark Warner, and Jack Reed, alongside Senate Banking Committee chairman Sherrod Brown, wrote to Janet Yellen. They asked the Secretary of the Department of the Treasury to explain their actions on cryptocurrencies amid sanctions against Russia.
The senators have expressed their concern about the war situation between Russia and Ukraine. They stated the financial entities of the Eurasian nation are preparing to circumvent the sanctions against them through a variety of cryptocurrency-related tools.
The New US Measures against the Access to Cryptocurrencies by Russia
The Office of Foreign Assets Control (OFAC) of the Treasury Department issued the Russian Harmful Foreign Activities Sanctions Regulations.
That set of rules will allow the United States to take action against transactions with cryptocurrencies by the banned Russian entities. It also encompasses deceptive or structured transactions or dealings with cryptocurrencies to evade US sanctions.
The US president introduced a measure to prevent exchanges from helping sanctioned Russian people and organizations use cryptocurrencies as an escape valve.
Europe Also Plans to Block the Use of Bitcoin in Russia
The EU also discusses measures to block the use of cryptocurrencies in Russia. Since international sanctions are seriously affecting the economy of the Eurasian country, the European branch of Sberbank is likely to go bankrupt.
Bruno le Maire, French Finance Minister, said the EU wants to prevent Russia from circumventing imposed sanctions through cryptocurrencies.
The ruble (RUB) price fell by 24% against the US dollar in 7 days. The total circulation of the value of the Russian fiat currency is lower than the market capitalization of Bitcoin.
Christian Lindner, the Finance Minister of Germany, stated the G7 is studying taking other measures to avoid unregulated cryptocurrencies. He said that they were also working to do it in the context of the German presidency of the G7.
Lindner said that the sanctions by Europe and the United States emerged after Ukraine requested support to corner Russian cryptocurrency users. In addition, he urged cryptocurrency exchanges to block all their customers from Russia inside and outside the Eurasian nation.
During the conflict, the price of Bitcoin has increased more in Russia and Ukraine than in other countries. The cryptocurrency is trading at around USD 40,902 and has accumulated a 6.6% gain in the last week, according to CoinGecko.
By Alexander Salazar
