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European Commission bans cross-border crypto payments between Russia and the EU

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(Kitco News) - The European Union has introduced a new set of sanctions against Russia in response to the ongoing conflict in Ukraine, which includes a complete ban on cross-border crypto payments between Russians and the EU. 

According to a statement released by the European Commission, "The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet (previously up to €10,000 was allowed)."

Other services that can no longer be provided to the government of Russia or legal residents include IT consultancy, legal advisory, architecture and engineering services. 

The new sanctions package follows the move by Russia to formally annex four regions in Ukraine that are currently under Russian control – a move that the EU called a "sham" referendum. 

Previous sanctions simply put a cap of 10,000 euros on crypto payments from Russian to EU wallets, but these new measures implement a total ban on cross-border crypto payments. This was done to "further deprive the Kremlin's military and industrial complex of key components and technologies."

This move follows the official approval of cross-border crypto payments by Russian authorities, which was revealed on Sept. 22. 

On Monday, Ivan Chebeskov, director of the financial policy department of Russia's Ministry of Finance, announced that the government plans to allow international settlements in digital assets for all industries without restriction. 

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"We are going to allow international settlements in cryptocurrencies for any industries without restrictions," Chebeskov said in an interview.

Chebeskov noted that while the Bank of Russia has sought to limit the integration of digital assets in the country and prefers to focus on the digital ruble, the Ministry of Finance "advocates the creation in Russia of a full-fledged infrastructure for the circulation of digital currencies."

"We believe that we need a local crypto infrastructure. First of all, to protect the interests of citizens. Because now those who trade their digital currencies on crypto exchanges are limited. Secondly, to control when the digital currency is used legally, and when - no," Chebeskov added.

The Bank of Russia previously reported that it plans to start testing the digital ruble with members of the public beginning in April 2023. If that goes well, it intends to allow the creation of wallets for non-residents and exchanges between the digital ruble and foreign currencies in 2024.  

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