Bank of Russia and Rosfinmonitoring Pilot Crypto-to-Fiat Transaction Monitoring

The Bank of Russia and Rosfinmonitoring (RFM) are developing a platform for banks to identify links between clients’ transactions involving traditional (fiat) money and cryptocurrency. This service is already being piloted by major credit institutions. The news was shared at the “Current Issues of AML/CFT” forum, organized by Rosfinmonitoring, by Ilya Bushmelev, Portfolio Management Director at Innotech (the technology partner for RFM’s “Transparent Blockchain” platform).

“Our task is to identify the connection between fiat and crypto transactions. Currently, credit institutions have all the tools to work with fiat, but cryptocurrency transactions are still considered separately. There are many tools for monitoring crypto transactions, and ‘Transparent Blockchain’ is one of them, created by Rosfinmonitoring. It also helps with the pilot project tasks set by the Bank of Russia and Rosfinmonitoring as part of the president’s directive,” Bushmelev explained.

In a conversation with RBC, he clarified that five major banks are participating in the project. The pilot will continue until the end of May this year, but may be extended indefinitely depending on the results.

“The results of the pilot should help form a basic understanding of the necessary actions and tools for credit institutions regarding crypto compliance, the ‘Know Your Crypto Client’ procedure, and ‘Know Your Crypto Transaction’,” Bushmelev said during the session. According to him, the pilot could help establish more effective cryptocurrency regulation.

Alexander Kuryanov, Head of Department at Rosfinmonitoring, noted at the same session that market participants are currently testing “scenarios linking a client’s fiat transactions with their non-fiat (crypto) operations.” “Based on this, it’s possible to develop certain methodological approaches and recommendations, which can generally be called ‘regulatory guidance’,” he emphasized.