The European Central Bank Votes On Crypto Regulation of Russian Sanctions

The President of the European Central Bank, Christine Lagarde, has made a call on policymakers and legislative experts. The call aims to draft and accept a regulatory framework on crypto for its authority and member nations.

This decision by the European Central Bank is in reaction to the present situation growing from Russia’s assault against Ukraine. So far, new sanctions have been imposed on Russian banks and energy companies. The goal of these sanctions includes preventing European companies from providing loans or credit lines to their Russian counterparts and selling securities to them. The undertakings of different countries can be seen as part of a broader set of restrictions imposed around the world in response to the current conflict.

Moreover, Lagarde stated that MiCA must be passed as soon as possible. Thus, they can have a legislative framework where crypto-assets can be captured.

The Importance of MiCA

MiCA is a reference for markets in crypto assets, a term that has been present since 2015. Since then, the European Commission and its regulatory board, monitored by the Court of Justice of the European Union (CJEU), initially recommended and implemented a regulation that established its stance on Bitcoin and other cryptocurrencies.

Following on, the regulatory framework on cryptocurrencies was suggested by Lagarde at an informal meeting of economic and finance ministers. In this meeting, she talked about how the European Central Bank has decided to be decisive and rigorous when putting sanctions on Russia.

Furthermore, Lagarde emphasized that when there is a ban or a way to stop, there are always ways to get around the ban or prohibition. 

For public information, the MiCA framework was first made public to the European Commission in September 2020. It was then adopted by the European Council in November 2021. However, according to the rapporteur Stefan Berge, there are concerns about the proposal’s misinterpretation as a ban on all proof-of-work (PoW) crypto mining operations. Therefore, there will be another voting round on February 28th on whether or not to make the plan happen.