Russian Banks Granted Authority to Block Accounts for Cryptocurrency Transactions

The Central Bank of Russia has clarified the grounds for blocking bank accounts. According to amendments to Regulation 375-P, financial institutions now have the right to freeze or even block a bank account if there are signs of digital currency transactions.

Transactions involving cryptocurrencies, as well as “operations related to the circulation of digital rights that are characterized by being one-directional, regular, and involving large sums,” have now been added to the list of suspicious transactions for money laundering or terrorism financing. The approved amendments will take effect in October 2021.

Stricter Cryptocurrency Regulations Ahead

The tightening of cryptocurrency regulations comes as the law “On Digital Financial Assets” comes into force. Starting January 1, 2021, the use of cryptocurrencies as a means of payment is prohibited in Russia. However, the regulation of mining, the organization of issuance, and the circulation of digital currency at the legislative level have not yet been established.

Earlier in January, Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market, stated that in 2021, control over cryptocurrency asset owners would only become stricter, as this issue had already been raised in the government. However, Aksakov did not specify exactly how control over the crypto market would be strengthened.

At the same time, the digital ruble being studied by the Bank of Russia is unlikely to have the same advantages as Bitcoin, according to Vasily Solodkov, Director of the Banking Institute at the Higher School of Economics. He noted that Bitcoin is notable for its ability to “bypass various restrictions.” In Solodkov’s opinion, the digital ruble is unlikely to offer the same level of freedom.