German Finance Minister Christian Lindner said on Wednesday that the G7 powers are considering measures to prevent Russian individuals and entities targeted by sanctions for the invasion of Ukraine from using cryptocurrencies to circumvent control devices.
“We must take steps to prevent people and institutions on this list from using cryptocurrencies that are not regulated. We have acted in this regard within the framework of the German presidency of the G7,” Lindner said in a statement.
In addition to the G7, the European Commission is also studying whether crypto-assets are being used to circumvent sanctions, according to a high-ranking European Union official interviewed by Reuters.
Cryptocurrency purchases in rubles have soared to record levels since the United States and its Western allies launched a sanctions package to cripple the Russian currency and banking sector, causing the ruble to record an all-time low.
Russians have flocked to cryptocurrencies in hopes of finding a safe haven value in them, like bitcoin, which runs on a decentralized network. No central entity can be sanctioned or prevent users from accessing these cryptocurrencies.
Cryptocurrency exchange Binance, however, has blocked accounts of any Russian customers targeted by sanctions.
The German minister did not specify what measures are being considered to limit the use of these digital currencies.
In principle, governments could ask platforms to limit access to certain users, as Ukraine has recently done with Russian accounts.
The use of cryptocurrencies to resist economic sanctions is nothing new, in countries like Iran or North Korea, which are also subject to economic sanctions, it is common.
A senior EU official told Reuters the bloc is aware that cryptocurrencies are a “possible escape route” to avoid sanctions.
The European Commission has read press reports and also received information directly, the official said.
The EU representative says that the increase in the value of some of these assets could be a response to attempts to circumvent sanctions. According to him, the topic is being analyzed, but no decision has been taken.
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