The European Union is finalizing its 20th sanctions package against Russia, which includes a radical proposal to ban all cryptocurrency transactions with Russian entities. This marks a significant escalation from previous targeted sanctions against individual platforms, aiming to close loopholes that officials claim have allowed Russia to use digital assets to circumvent existing financial restrictions.
The draft proposal, reported by the Financial Times, seeks to prohibit EU individuals and companies from engaging with any crypto asset service provider established in Russia. An internal European Commission document cited in the report states, "Any further listing of individual crypto asset service providers […] is likely to result in the set-up of new ones to circumvent those listings," justifying the need for a blanket ban.
The sanctions package, expected to be adopted around February 24, also targets 20 additional Russian regional banks and several banks in third countries, including Kyrgyzstan's Keremet and OJSC Capital Bank of Central Asia, as well as institutions in Laos and Tajikistan.
A primary target of the new measures is the ruble-pegged stablecoin A7A5. Despite being sanctioned by the US in August 2025 and the EU in October 2025, A7A5 emerged as one of the fastest-growing non-dollar stablecoins by market value in 2025. Blockchain analytics firm Elliptic reported it processed over $100 billion in cumulative transfers by January 2026. The stablecoin, which runs on Tron and Ethereum, is allegedly 51% owned by sanctioned Moldovan oligarch Ilan Shor, with the remaining 49% held by the already-sanctioned Russian state bank Promsvyazbank. It is officially issued by a Kyrgyzstan-registered company.
However, analysts question both the legitimacy of A7A5's activity and the EU's ability to enforce the ban. Blockchain analytics firm Global Ledger identified patterns consistent with wash trading that may have inflated A7A5's volumes. Furthermore, Global Ledger's co-founder Lex Fisun argued that a technical blockade is unlikely because decentralized infrastructure remains resistant to direct censorship. "For European exchanges to enforce such a ban, they would essentially have to block all flows from major global trading hubs, a move that would paralyze the legitimate crypto market," Fisun told Cointelegraph.
The proposal faces political hurdles, as all 27 EU member states must agree for it to pass. Reports indicate at least three countries are already opposing the crypto-specific elements of the package, creating uncertainty about its final adoption. If passed, enforcement would fall to individual member states with varying regulatory capacities.
