The European Union is planning one of its strongest actions yet against Russia, looking to ban all digital asset transactions connected to Russia. This would be part of the EU’s 20th sanctions package since the war in Ukraine began.

If approved, the new rule would stop people and businesses in the EU from using Russian digital asset platforms or sending bitcoin or other digital currencies to Russian entities. It would also block the use of Russia’s central bank digital currency, known as the digital rouble.

EU officials say the goal is simple: close financial loopholes and stop Russia from using digital assets to get around sanctions.

Until now, the EU has mainly sanctioned specific Russian digital asset companies. But officials believe that approach has not worked well enough.

According to Financial Times’ report, “Any further listing of individual cryptoasset service providers […] is therefore likely to result in the set-up of new ones to circumvent those listings.”

In other words, when one company is banned, another one quickly replaces it. Because of this, the EU now wants a complete ban on dealing with any digital asset service provider established in Russia. The report adds:

One major concern is Garantex, a Moscow-linked digital asset exchange that was sanctioned by the United States in 2022 for “operating as the exchange of choice for cybercriminals.”

EU officials are worried about new platforms that appear after older ones are sanctioned.
The proposal also appears to target A7, a Russian payments platform, and its rouble-pegged stablecoin A7A5.

According to blockchain analytics firms Elliptic, transactions involving A7A5 have surpassed $100 billion, even after restrictions from the US, UK and EU.

That large volume has increased concerns that digital assets can be used to move money outside traditional banking systems, allowing people to send money across borders without using banks.

While this technology has many benefits, regulators worry it can also be used to avoid sanctions. As Russian banks and energy exports face heavy restrictions, EU officials believe bitcoin and digital assets may offer another way to move funds internationally.

Under the proposal, people and businesses in the EU would not be allowed to:

This new ban is only one part of a larger sanctions plan. The EU also plans to sanction 20 more Russian banks as part of this package.

The EU also wants to fully ban services to ships carrying Russian crude oil. This would stop EU companies from providing insurance, maintenance, or other support to those ships.

For the sanctions to become law, all 27 EU member states must agree. Reports say three countries have raised concerns and want more information before approving the plan.