Industry experts reveal a possible method for Bank of Russia to block crypto

The Bank of Russia is looking to block cryptocurrency trading without any new laws. The Russian Central Bank has revealed that it’s working on a system which would automatically detect suspicious transactions and stop them from occurring, despite the lack of an official ban.

The “bis asks central banks to urgently develop cbdcs to compete with crypto assets” is a possible method for Bank of Russia to block cryptocurrency. Industry experts believe that the bank may be able to use their control over the financial system and regulatory authority, to create a new digital currency.

Industry experts reveal a possible method for Bank of Russia to block crypto

 

A local industry leader has revealed a possible mechanism for the Bank of Russia to ban crypto transactions, amid the continuous uncertainty regarding the future of cryptocurrencies in Russia.

According to Forbes Russia, Andrey Mikhaylishin, CEO of local crypto payment firm Joys, the Russian central bank is reportedly studying numerous potential approaches to make its crypto ban conceivable.

Blocking debit card payments to crypto exchanges or wallets using merchant category codes (MCC) is one of the conceivable restriction ways, according to Mikhaylishin. According to the article, the executive learned about the blocking mechanism via Bank of Russia personnel.

MCC codes are four-digit identifiers that credit card processors such as Visa and Mastercard use to define a merchant’s major business activity. The 6051 MCC number, for example, is used to identify crypto transactions, while the 5411 MCC code is used to identify purchases in food shops. The Bank of Russia, according to the article, might force local banks to simply prohibit transactions with the 6051 MCC code.

While the proposed proposal seems to be still under consideration in Russia, several industry insiders have questioned its efficacy.

According to Maria Stankevich, a member of the Russian Committee on Blockchain Technologies and Cryptoeconomics, prospective MCC-based limitations would drive transparent enterprises out of the country while leaving illegitimate crypto exchanges alone:

“I am 100 percent certain that if they limit transfers to bitcoin with the correct MCC, honest exchanges would abandon the sector.” There will be grey crypto exchanges that engage in “miscoding,” or the use of different codes for transactions.”

Stankevich believes that miscoding fines imposed by providers like as Visa are inadequate to bring unlawful crypto trading to a halt. As previously reported, Russia has a number of grey crypto firms, with at least 50 of them based in Moscow City, the country’s financial centre.

The executive also voiced confidence about the cryptocurrency market in Russia, noting that the Bank of Russia is the country’s lone regulator that opposes bitcoin adoption:

“We’ve always known that the central bank is opposed to cryptocurrency and wants it prohibited, but I don’t believe that this will happen in Russia since the central bank is in the minority.”

Banning cryptocurrency in Russia is ‘very achievable,’ according to the governor of the Bank of Russia.

“I personally know a number of high-ranking Russian officials that recognize the relevance of crypto,” Stankevich remarked.

The announcement comes after Bank of Russia governor Elvira Nabiullina said that the bank intends to prohibit the use of cryptocurrency in the Russian banking system. Russians will only be permitted to invest in cryptocurrencies like Bitcoin (BTC) via foreign corporations, according to another bank executive.

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The “bis crypto” is a possible method that was revealed by industry experts. The method would block cryptocurrency from entering the country, but it would also block all internet traffic.

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