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Brussels is seeking to ban all cryptocurrency transactions in Russia, in a bid to break Moscow using assets outside the traditional banking system to evade sanctions.

The European Commission proposed the sweeping move instead of trying to ban copycat Russian crypto entities kicked out of already authorized platforms, according to a document seen by the FT. Brussels says such entities are used to facilitate trade in goods used in the Kremlin’s war against Ukraine.

“Any additional list of individual cryptoasset service providers … is therefore likely to result in the set-up of new ones to avoid the lists,” reads an internal Commission document listing the proposed sanctions for EU capitals.

“To ensure that the sanctions achieve their intended effect (the EU) prohibits the participation of any crypto asset service provider, or the use of any platform that allows the transfer and exchange of crypto assets established in Russia,” it added.

Brussels has also proposed banning the export of some dual-use goods to Kyrgyzstan, saying Kyrgyzstan companies sell banned goods to Russia, such as mechanical and electronic components used in weapons and drones.

That ban is the first use of anti-circumvention powers, which have been the focus of the EU’s 20th package of sanctions since Russia’s invasion of Ukraine.

“Imports of common high-priority goods from the EU to Kyrgyzstan have grown almost 800 percent since the start of the war, while exports from the country to Russia are 1,200 percent higher,” the document said, adding that continued trade “indicates an ongoing and extremely high risk of circumvention”.

The imposition of new measures requires the united support of member states. Three of the bloc’s 27 countries have expressed doubts, according to three diplomats briefed on the discussions. One said they wanted more information about outreach before proceeding.

The Commission initially planned for the package to be agreed before the fourth anniversary of the invasion of Moscow on February 24.

EU sanctions ambassador David O’Sullivan is due to travel to Kyrgyzstan later this month to discuss the EU’s circumvention concerns.

“Despite numerous requests and negotiations, the Kyrgyz Republic has not adopted or implemented sufficient measures,” the Commission’s document said.

The Commission’s proposal focuses on preventing the development of successors to the Russia-linked cryptocurrency exchange Garantex, which was authorized by the US in 2022 for “operating as the exchange of choice for cybercriminals”.

These proposals appear to be aimed at A7, a Russian payment platform, as well as the ruble-linked stablecoin A7A5.

The US, UK and EU have also previously adopted tough measures against the company. Last month, however, blockchain analytics company Elliptic found that the aggregate volume of stablecoin transactions exceeded $100bn mark.

The commission also proposed adding 20 banks to the list of permitted entities, and banning any transactions using the digital rouble, which is backed by Russia’s central bank.

The package also includes a absolute prohibition in the services of vessels carrying crude oil in Russia. This will prevent companies that offer insurance, maintenance and other services to tankers.

This will in effect replace the current system of restrictions that only affect oil sold above a price cap set by the G7 designed to reduce the Kremlin’s export revenues.

Some member states have raised concerns, saying it would only allow non-EU companies to take over the business, according to diplomats.

There are also restrictions on imports from Russia of goods including steel and scrap.

Additional reporting by Paola Tamma and Henry Foy in Brussels, and Chris Cook in London