Digital currencies are used to try to circumvent Western countries’ sanctions against Russia, deplores the President of the ECB.
The President of the European Central Bank (ECB), Christine Lagarde, warned on Tuesday of the “threat” posed by cryptocurrencies obtained in exchange for rubles in an attempt to circumvent the sanctions of Western countries against Russia.
Of all the digital asset classes, “cryptoassets concern me the most in the Russian context,” the central banker told a Bank for International Settlements innovation forum.
“Is this a threat? Yes,” she said, after pointing out that cryptocurrencies outside the traditional banking system are “certainly being used as a means of trying to circumvent the sanctions that have been decided by many countries around the world against Russia and specific actors.
Individuals or Russian companies “Obviously try to convert their rubles into cryptoassets,” noted Ms. Lagarde, noting that the volumes of rubles converted had reached a particularly high level since the sanctions imposed by the West.
Europe recently extended its catalog of sanctions taken after the start of the conflict in Ukraine to cryptocurrencies, in particular by excluding Russian banking establishments from the Swift international interbank system.
But cryptocurrencies, using blockchain technology, can be used outside the banking system by sanctioned individuals to continue transacting.
Before the armed conflict in Ukraine, Russia already occupied the top of the world podium for the use and creation (“mining”) of cryptocurrencies.
Bitcoin, the most famous of cryptocurrencies, “is not (…) a store of value, but rather a speculative asset, which is a bit like tulip bulbs in the Netherlands in the 17th century”, has his side declared the Governor of the Banque de France, François Villeroy de Galhau, at the opening of the forum.
Central bankers are accustomed to criticism of cryptocurrencies because of their high volatility, their possible use for the benefit of criminal activities and more generally their opacity.
The ECB is betting on the creation within 5 years of a digital euro as a secure and anonymous central bank currency for daily payments, alongside cash.
For this complex project, “we are on time and on budget,” assured Ms. Lagarde.