The European Union today announced its eighth package of sanctions against Russia for its war with Ukraine. It previously banned crypto asset portfolios over €10,000, but this is now expanded to a blanket ban. Applies to wallets, accounts and custody services.

The Russian government has been exploring circumventing sanctions by allowing local businesses to transact with foreign companies using cryptocurrencies. One of the options being considered is to use stablecoins pegged to gold and other commodities. Tokens backed by real-world assets are called digital financial assets (DFAs) and are already legal, but must be approved by the central bank. Only a handful of DFAs have been approved to date.

The Central Bank of Russia, like many world central banks, does not like cryptocurrencies. But apparently even the central bank is willing to contemplate cryptocurrencies for limited cross-border use.

In September, Russian Prime Minister Mikhail Mishustin decreed a deadline of 2022 to clarify the use of digital financial assets “to contribute to the uninterrupted payment for the supply of goods from abroad and for export”. The same applies to cryptocurrency for international settlement.

Additionally, the central bank has accelerated its work on a central bank digital currency (CBDC) with pilot tests set to begin next year.