A new package of European Union sanctions adopted yesterday includes bans on transactions with organisations from Belarus and Russia providing crypto-asset services. It also introduces a prohibition on dealings with the central bank digital currencies of the two countries.
“It shall be prohibited to directly or indirectly engage in any transaction involving crypto-assets or central bank digital currencies […], as well as to provide any support for the development of such crypto-assets or central bank digital currencies,” the new article of the EU sanctions regulation states.
The annex referenced in the article already lists the Belarusian digital ruble. Measures concerning it will enter into force on May 24.
Another new article, also entering into force on May 24, prohibits “directly or indirectly engaging in any transaction with a legal person, entity or body that is a crypto-asset service provider or a platform facilitating the exchange or transfer of crypto-assets and is registered in Belarus”.
The ban does not apply to transactions necessary for the functioning of diplomatic missions of EU member states in Belarus. It also does not affect transactions by EU citizens residing in Belarus who lived there before February 24, 2022.
Similar provisions have been introduced into the sanctions regulation concerning Russia. The list of Russian digital currencies now includes RUBx and the digital ruble. Previously, the EU had already banned transactions with the A7A5 cryptocurrency linked to Russia. In addition, the “Russian” regulation states that competent authorities may authorise transactions that are “strictly necessary for the withdrawal of assets from Russia or for the termination of business activities in Russia”.
Previously, the EU sanctions regime included a ban on providing crypto-asset services to Belarusian citizens and residents of the country. An exception was made for Belarusians holding residence permits in EU, European Economic Area or Swiss jurisdictions.
Belarus is planning to begin the rollout of a digital Belarusian ruble in the second half of the year. Yesterday, First Deputy Chairman of the National Bank Aliaksandr Yahorau said that preparatory work is expected to be completed by July 1, allowing test payments using the digital ruble. The National Bank is working with two state-owned and two private banks that will be the first to use the digital currency. However, it appears that it has already fallen under EU sanctions.
Crypto banks are also expected to appear in Belarus in the second half of the year. A decree on their establishment was signed in the spring. According to Yahorau, the operations that crypto banks will be allowed to perform and a list of 26 cryptocurrencies they can work with have already been defined.
