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The Russian Central Bank now monitors P2P transactions, including crypto

The regulator’s advice aims to avert capital flight in the case of economic collapse.

The Central Bank of Russia (CBR) has advised that the country’s commercial banks increase their monitoring of customers’ transactions that may be intended to avoid the CBR’s “special economic measures to fight foreign currency outflows,” local media reported Thursday. The recommendation involves tighter monitoring of cryptocurrency trading, which is mentioned as a method of capital withdrawal from Russia.

The letter, sent Wednesday by CBR deputy chairman Yuri Isaev to financial institutions, asks them to pay more attention to instances of their clients’ “abnormal behavior.” This category contains “abnormal” transactional activity and unusual spending patterns. Any money withdrawals made via digital currency should also be scrutinized more closely, the letter states.

Suspicious transactions should be banned if necessary, and information concerning them should be forwarded to the Federal Financial Monitoring Service (Rosfinmonitoring).

Special measures to curb foreign currency outflows were adopted in the early days of the Ukraine war and the subsequent economic sanctions. They include a $5,000 limit on foreign currency transactions for Russian citizens and a $10,000 cash limit for individuals travelling overseas. Government authorization is required to purchase real estate, securities, and other assets from inhabitants of “hostile” jurisdictions.

Aleksey Voylukov, vice-chairman of the Russian Banks Association, told journalists that the CBR’s suggestions aim to prevent the growth of methods to circumvent imposed limits, particularly via cryptocurrency exchanges.

The finding is unsurprising given that over ten million Russian citizens collectively own over 5 trillion rubles ($63 billion) in cryptocurrency. With their Visa and Mastercard cards banned and their own government enforcing severe transaction limits, many Russian residents are left with cryptocurrency as their sole means of payment.

Despite widespread tales about Russian oligarchs attempting to conceal their money, it is ultimately ordinary people that rely on the digital asset infrastructure in the face of surging inflation and the government’s tightening monetary control.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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