Bank of Russia has recommended commercial banks pay heightened attention to their clients’ transactions related to cryptocurrencies. The regulator requires the financial institutions to monitor such activity against the backdrop of restrictions on currency operations amid western sanctions.
Monetary authority urges banks to control spending on crypto assets
The Central Bank of Russia (CBR) has informed banks of the need to track certain transactions, including those involving cryptocurrencies. The financial regulator has sent a letter calling on institutions to identify “abnormalities in the transactional activity” of their customers such as changes in consumer and investment spending.
According to the document, quoted by Forklog, bank officials should open their eyes for unusual growth in transaction volume, withdrawals to other jurisdictions and transactions associated with digital currency. 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 thorough customer verification, consider refusing to complete the transaction and classify it as suspicious,” the CBR said in the notice that had been coordinated with Rosfinmonitoring, the main financial monitoring organization 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 monetary authority proposed a ban on a wide-range of activities such as issuing, mining and trading of cryptocurrencies. It has also previously advised banks to block cards and wallets used to transact with crypto exchanges.
Most other Russian institutions and regulators, led by the Ministry of Finance, have backed a different approach that emphasizes tightly-monitored regulation. In February, the Minfin submitted a new “Digital Currency” bill that aims to legalize crypto transactions through authorized Russian banks and close other gaps in the regulatory framework established with the “On Digital Currency” law. 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. Western allies have taken steps to prevent Moscow from employing crypto assets to evade the restrictions.
