ecb-president-calls-for-crypto-regulation-in-response-to-russia-potentially-evading-sanctions

ECB president calls for crypto regulation in response to Russia potentially evading sanctions

“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,” said Christine Lagarde.

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ECB president calls for crypto regulation in response to Russia potentially evading sanctions

Christine Lagarde, president of the European Central Bank (ECB), has called on lawmakers to approve a regulatory framework on crypto, hinting at potentially preventing Russia from getting around economic sanctions.

Speaking to reporters at an informal meeting of economics and finance ministers on Friday, Lagarde said the European Central Bank would be “decisively and rigorously” implementing the sanctions on Russia imposed by European lawmakers in response to the country’s invasion of Ukraine. In response to a question on Russia potentially using crypto to evade some of these measures, the ECB president urged action on an existing proposal for a regulatory framework on digital assets.

“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,” said Lagarde. “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.”

European Central Bank President Christine Lagarde. Source: YouTube

The MiCA, or Markets in Crypto Assets, proposed creating “a regulatory framework for the crypto-assets market that supports innovation and draws on the potential of crypto-assets in a way that preserves financial stability and protects investors.” First introduced to the European Commission in September 2020 and adopted by the European Council in November 2021, the proposal was scheduled for a vote to be implemented by the European Parliament on Monday. 

However, rapporteur Stefan Berge announced on Friday he had postponed the vote amid concerns it would be misinterpreted as a ban on proof-of-work crypto mining. At the time of publication, there is no scheduled date for EU officials to vote on the framework.

On Thursday, United States President Joe Biden announced a series of sanctions aimed at imposing “devastating costs” on Russia due to the country’s attack on Ukraine. The president announced that the United States and its allies would impose sanctions on five major Russia-based banks as well as several elite nationals who have “enriched themselves at the expense of the Russian state.” The economic measures did not include cutting Russia off from the SWIFT payment system or crypto transfers.

Related: Crypto community reacts to Russia’s war in Ukraine

The situation in Ukraine is still developing, but there have been reports of Russia bombing locations across the country including a military airport near the capital city of Kyiv since Russian President Vladimir Putin announced a “special military operation” on Thursday. Members of the crypto community have offered donations to the Ukrainian military and local organizations as the crisis unfolds.