Blanket crypto ban targets Russia rails but one chokepoint decides whether flows die or just relocate offshore
The EU's proposed blanket crypto ban on Russia aims to sanitize infrastructure, but its success hinges on controlling stablecoin issuers and third-country intermediaries.Summary
The European Commission's 20th sanctions package proposes a comprehensive ban on all cryptocurrency transactions involving Russia, shifting focus from sanctioning specific actors to sanitizing the underlying infrastructure.
Enforcement data already shows that previous sanctions have displaced crypto flows from centralized exchanges (down 30%) to high-risk, decentralized services (up over 200%). The effectiveness of the new blanket ban depends critically on controlling three chokepoints: stablecoin issuers (like Tether or Circle) who control fiat on/off-ramps; third-country financial intermediaries outside direct EU jurisdiction; and rigorous compliance by EU-regulated crypto asset service providers (CASPs).
The outcome hinges on whether the EU can achieve a "chokepoint squeeze," forcing stablecoin issuers to block Russia-linked wallets and pressuring third-country facilitators through secondary sanctions. If coordination fails, the ban will likely result in displacement, where Russia continues using crypto for trade via offshore venues and bespoke rails like the sanctioned A7A5 stablecoin, merely at a higher cost and with reduced EU visibility.
(Source：CryptoSlate)