The Central Bank of Russia is currently examining various ways to prevent Russians from investing in cryptocurrency. One of the options on the table is to block card payments to certain recipients such as crypto exchanges, a media report has revealed. A recent meeting in the State Duma, however, indicated that the authority’s intransigent position is not supported by other government institutions in Moscow.
Russia’s central bank considers mechanisms to limit crypto investments
In discussions with financial market participants, the Central Bank of Russia (CBR) discussed several approaches to restrict access to cryptocurrencies for domestic investors, the Russian edition of Forbes magazine revealed, citing sources. close to the file. According to Andrey Mikhaylishin, founder of a crypto project tested in the regulator’s sandbox, one of the options being considered is to block card payments to crypto platforms.
The monetary authority may try to force banks to stop transactions with certain merchant category codes (CM), four-digit numbers assigned to payment recipients according to the services they offer. The code used for digital asset exchanges is 6051, the report notes. Mikhaylishin learned that the idea was discussed by a central bank employee, and the publication was able to confirm the information from his own source close to the CBR.
While the Bank of Russia has recommended that commercial banks block cards and wallet accounts used by suspicious entities, among which it has listed crypto exchange service providers, the institution has yet to release. advisory report detailing its global position on cryptocurrencies. The report is expected to be considered by a task force set up in the State Duma that is currently considering regulations for crypto-related activities that remain outside the scope of the “Digital Financial Assets” law. . This law entered into force at the beginning of the year.
The group held its first meeting in the lower house of the Russian parliament on Tuesday. During the discussions, Deputy Governor Olga Skorobogatova made it clear that the regulator is not drafting a law banning cryptocurrencies, but at the same time, she underscored CBR’s strong opposition to their circulation in the country. The central bank plans to ban crypto investments, Skorobogatova said, according to sources cited by Forbes – an authority employee and another official, who were present at the meeting.
Bank of Russia alone in its conservative approach to cryptocurrency regulation
The two sources also shared that the Bank of Russia’s intransigent stance was not fully supported by other participants. Russia’s Federal Financial Supervisory Service Deputy Director Herman Neglyad has proposed allowing cryptocurrency to circulate while imposing strict controls on financial flows between the crypto space and the traditional financial system. Deputy Finance Minister Alexey Moiseev has suggested limiting crypto purchases, but only for unqualified investors.
In his opinion, it is now too late to ban cryptocurrency altogether, given that 10 million Russian citizens have already acquired one coin or another, according to the department’s own calculations. According to the Russian Association for Cryptoeconomics, Artificial Intelligence and Blockchain (Racib), 17.3 million people in Russia have crypto wallets and the actual number may be even higher because the data does not cover traders who use VPNs.
The ministry’s press service told Forbes that banning cryptocurrencies now would create a lot of problems for Russians because such a move would make their holdings illegal. Estimates cited in the overview of financial stability of the Bank of Russia for the second and third quarters of 2021, indicate that the annual volume of digital currency transactions carried out by Russian residents amounts to approximately $ 5 billion. And according to the head of the Duma’s Financial Markets Committee, Anatoly Aksakov, the Russians have invested 5,000 billion rubles in crypto (over $ 67 billion).
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