Bank of Russia has recommended commercial banks pay heightened attention to their clients’ transactions related to cryptocurrencies. This is because of western sanctions and restrictions that restrict currency operations.
Monetary Authority urges banks to control spending linked to crypto assets
Banks have been notified by the Central Bank of Russia (CBR), that they must track transactions involving cryptocurrency. The financial regulator has sent out a letter calling on the institutions to identify “anomalies in the transactional activity” of their clients like changes in consumer and investment spending.
Forklog quotes a document that says bank officers should be alert for unusual transactions, withdraws from other countries, and digital currency-related transactions. The monitoring should also cover operations by persons and entities in circumvention of foreign currency restrictions and withdrawal of assets by organizations registered in “unfriendly” countries.
“In such cases, banks are advised to conduct an in-depth check on the client, consider refusing to complete the transaction and classifying it as suspicious,” the CBR said in the notice which had been coordinated with Rosfinmonitoring, the main financial watchdog in the Russian Federation.
Bank of Russia has been a strong opponent to the ongoing efforts to legalize the crypto market in Russia, citing risks for the country’s financial stability and its citizens. In January, the central bank proposed banning a range of activities including trading, mining, and issuing cryptocurrency. The monetary authority has previously advised banks that they block wallets and cards used for crypto-exchange transactions.
Many other Russian regulators and institutions, including the Ministry of Finance have supported a more strict approach to regulation. In February, Minfin submitted a new draft law “On Digital Currency” which aims to legalize crypto operations through authorized Russian banks and fill other gaps in the regulatory framework established with the law “On Digital Financial Assets” last year.
The latest attempt by the CBR to curb crypto-related transactions comes despite recent statements revealing Russia’s interest in using digital currencies to restore its access to global finances, severely limited by sanctions over its military invasion of Ukraine. The West has taken measures to stop Moscow using crypto assets to circumvent the restrictions.
Is it possible for the Central Bank of Russia to change its attitude toward cryptocurrencies in light of mounting sanctions? Leave your comments below.
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