The president of the European Central Bank, Christine Lagarde, said that in Russia cryptocurrencies are used to evade sanctions imposed by the West. The statements came Tuesday, hours before the White House announced new sanctions against the invading country by the US and the European Union.
Lagarde pointed out that there is evidence that some Russians may be using digital assets to evade sanctions for the invasion of Ukraine, converting rubles into cryptocurrencies and stablecoins, as well as stablecoins into other digital assets.
In her dissertation at the Bank for International Settlements Innovation Summit, she indicated that monetary authorities are seeing an unusual increase in the volume of transactions with cryptocurrencies involving the ruble, as reported by Bloomberg†
“If you see the volumes of rubles in stable, in cryptos, right now this is the highest level we have seen since maybe 2021,” the European official said at the virtual conference.
Likewise, she stressed that cryptos are “certainly being used as a way to try and circumvent the sanctions decided by many countries around the world against Russia and a certain and specific number of players.”
In her speech, however, Lagarde did not directly point out that the Russian government is evading sanctions through the use of cryptocurrencies. She said it is Russian companies and individuals who are using digital money for this purpose.
Lagarde believes that cryptocurrencies threaten the sanctions to achieve their goal, while seizing the opportunity to promote the benefits of the digital euro, the central bank digital currency (CBDC) that the ECB plans to launch soon.
The head of the ECB said CBDCs “are associated with safety, robustness, security and benefit (from) the trust often associated with the national financial institution, such as a central bank.”
She also warned that cryptocurrencies should not be left as a loophole when it comes to sanctions.
European governments have “taken steps to make it clear to anyone who exchanges, transacts and provides services related to crypto assets that they are complicit in circumventing sanctions that would otherwise apply,” she stressed.
New sanctions against Russia at NATO summit
Also on Tuesday, the White House said President Joe Biden and his European allies would hold an emergency NATO summit in Brussels on Thursday. There, too, Biden will meet the Group of 7 and attend a meeting of the European Council.
A new package of sanctions against Russia will be announced during the meeting with European heads of government. White House National Security Adviser Jake Sullivan said the new measures are aimed at preventing the Kremlin from evading current economic sanctions.
This means that “not only will new sanctions be added, but a concerted effort will be made to tackle the evasion,” the official said. Bloomberg†