The Chairman of the European Central Bank, Christine Lagarde, sees cryptocurrencies as a tool for possible circumvention of sanctions, which Russia will be able to use if the EU does not speed up work on its cryptocurrency legislation.
Lagarde urged lawmakers to quickly approve the regulatory framework regarding cryptocurrencies, hinting that cryptocurrencies could otherwise help Russia bypass the imposed economic sanctions.
Speaking to reporters at an informal meeting of economy and finance ministers on Friday, Lagarde said the European Central Bank will “decisively and rigorously” enforce sanctions against Russia imposed by European lawmakers in response to the country’s invasion of Ukraine.
Responding to the question that Russia could potentially use cryptocurrencies to evade some of these measures, the President of the ECB called for faster adoption of bills regarding the regulatory framework for 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,” Lagarde said. “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.”
In September 2020, the package of regulatory bills known as MiCA was submitted to the European Commission and adopted by the European Council in November 2021. On February 28, a vote on these amendments was scheduled in the European Parliament. But this week, the vote was decided to be postponed due to the need to clarify issues related to the mining of cryptocurrencies operating on the Proof-of-Work consensus, such as bitcoins.
“The discussion about MiCA indicates that individual passages of the draft report can be misinterpreted and understood as a [proof-of-work] ban,” wrote Stefan Berger, a member of the economic committee of the European Parliament. “It would be fatal if the EU Parliament sent the wrong signal with a vote under these circumstances.”