The Central Bank of Russia is currently looking at various options to stop Russians investing in cryptocurrency. According to a media report, one option is to stop card payments being made to certain recipients like crypto exchanges. However, a recent meeting at State Duma revealed that other institutions in Moscow are not supportive of the authority’s hardline position.
Russia’s Central Bank Looks at Mechanisms to Limit Crypto Investments
According to Forbes magazine, the Central Bank of Russia has been in discussions with market participants about a variety of ways to limit access to cryptocurrency for domestic investors. Forbes Russian Edition has reported that the Central Bank of Russia has discussed several options. Andrey Mikhaylishin is the founder of a crypto-project that was tested in the regulator’s Sandbox. One of the options being considered is to stop card payments to crypto platforms.
Banks may be forced to stop transactions using Merchant Category Codes (MCC), four digit numbers that are assigned to recipients of payments depending upon the services they provide. The report notes that 6051, is the code used to exchange digital assets. Mikhaylishin discovered that the idea was discussed by a central bank employee. The publication was able confirm the information from its source close to CBR.
Bank of Russia advised commercial banks to block wallet accounts and cards used by suspicious entities. It also listed crypto exchange service provider providers. However, the institution has not yet released an advisory report outlining its complete position on cryptocurrencies. A State Duma working group should review the report. This group is currently examining regulations for crypto-related activity that are not covered by the law “On Digital Financial Assets.” It was enacted at the start of this year.
On Tuesday, the group met for the first time at Russia’s lower house. Deputy Governor Olga Skorobogatova clarified that the regulator wasn’t drafting a law banning cryptocurrencies, but she also stressed the CBR’s strong opposition to cryptocurrency circulation in Russia during the discussions. According to Forbes, Skorobogatova stated that the central bank intends to ban crypto investments. This was according to Skorobogatova and another official who attended the meeting.
Bank of Russia Alone in its Conservative Approach to Cryptocurrency Regulation
Both sources agreed that the Bank of Russia’s extreme position was not supported fully by other participants. Herman Neglyad (Deputy Director of Russia’s Federal Financial Monitoring Service) suggested allowing cryptocurrency to circulate, while maintaining strict control over financial flows between crypto and traditional financial systems. Alexey Moiseev, Deputy Finance Minister, suggested that crypto purchases be limited to qualified investors.
According to him, it is too late for cryptocurrency bans. This is because 10 millions of Russian citizens have already purchased one or another coin, according to department calculations. The Russian Association of Cryptoeconomics Artificial Intelligence and Blockchain, (Racib) states that 17.3,000,000 Russian citizens have crypto wallets. However, this number could be higher since it doesn’t include traders who use VPNs.
Forbes was informed by the ministry’s press office that banning cryptocurrency now would cause a lot of problems to Russians because it would make their holdings illegal. According to estimates in Bank of Russia’s Financial stability overview for Q2 and Q3 of 2021, the annual volume of cryptocurrency transactions by Russian citizens amounts to about $5 billion. According to Anatoly Aksakov (head of the Financial Market Committee in the Duma), Russians have invested over $67 trillion in crypto.
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Lubomir Tassev, a journalist hailing from tech-savvy Eastern Europe, likes Hitchens’s quote: “Being an author is what I am rather than what it is.”
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