Russian Central Bank Orders Local Banks to Block Cryptocurrency Transactions

Russia bank building showing gate

The Russian Central Bank ordered local commercial banks to block any crypto e-pay. And also any related crypto exchange.

In a statement, It insists on removing internet-based “shadow economy” businesses. It directed local banks and e-pay operators to single out accounts and E-wallets. That belongs to “illegal business activities,” for instance, “cryptocurrency activities,” which it categorized as “online casinos and lotteries,” “financial pyramid schemes,” and forex dealers.

Through the statement, the central bank wants the domestic financial institution to. “Block and completely stop servicing” transactions related to accounts flagged as shadow economy.

The Russian Central Bank also further gave banks a list of protocols. These, they believe. Would guide them to identify the suspected “shadow economy” activities. 

It completed the statement by insisting on a familiar warning. “Crypto, casinos and forex are fradulent schemes and high risk of losing money.”

The Kod Durov media outlet commented that through the new measures. “The Bank of Russia has taken a step to stop the circulation of cryptocurrencies in Russia. Without direct legal prohibitions on exchanges and trading of cryptocurrencies for individuals.”

The Bank of Russia is in a lengthy stalemate with pro-business forces within the government about crypto policy. Despite their calls for a blanket ban on all crypto-related activities, the finance ministry and other state organs are against the move.

This stand-off has led to a level of inaction in the regulatory space. Yet, some measures such as tax reporting obligations on crypto earnings and the ban of crypto as a form of payment have passed.

Despite the regulations, crypto mining is rising in Russia. With larger businesses advocating for tokenization. Furthermore, Russia’s most large bank and tech giant, Sberbank, has also already launched stablecoin. This, despite the Bank of Russia insisting on limiting stablecoin usage.