The Group of Seven (G7) industrialised nations are examining ways to stop individuals or companies targeted by western sanctions over Russia’s invasion of Ukraine using cryptocurrencies to dodge the punitive measures.
“We should take measures to prevent listed persons and institutions from switching to unregulated crypto assets,” Germany’s Finance minister Christian Lindner said.
Cryptocurrency purchases in roubles have climbed to a record high since the US and its allies have sought to cripple Russia’s banking sector and currency with a barrage of sanctions.
They include cutting selected Russian banks from the SWIFT messaging system, rendering them isolated from the rest of the world.
Western measures that prohibit transactions with Russia’s central bank have also plunged the country’s economy into turmoil.
As a result, Russians are flocking to cryptocurrencies like bitcoin and tether that operate on a decentralised network and therefore are not directly affected by sanctions.
Governments can however, if they wish, order shopping platforms to place restrictions on purchases made using cryptocurrencies as a way of blocking attempts to get round sanctions.
Ukraine’s deputy prime minister Mykhailo Fedorov, who is also minister of the country’s digital transformation, has demanded via Twitter that crypto platforms block Russian accounts.
- AFP, with editing by George Russell