The Group of Seven 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, Germany’s finance minister said Wednesday.
“We should take measures to prevent listed persons and institutions from switching to unregulated cryptoassets. We are working towards this in the context of the German presidency of the G7,” said Christian Lindner.
Cryptocurrency purchases in rubles have climbed to a record high since the United States and Western allies have sought to cripple Russia’s banking sector and currency with a barrage of sanctions over last week’s invasion.
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.