Central Bank of Russia Tightens Monitoring of P2P Transactions, Including Those in Crypto

The Central Bank of Russia (CBR) recommended The country’s commercial banks are stepping up surveillance of user transactions that could be aimed at circumventing CBR’s “special economic measures to curb the outflow of foreign currency,” local media reported Thursday. The recommendation includes closer scrutiny of crypto trading, which has been cited as one of the vehicles for raising capital from Russia.

The letter, sent to the banking organizations on Wednesday by CBR Vice-President Yuri Isaev, instructs them to pay more attention to the cases of “unusual behavior” of their customers. This includes “abnormal” transaction activity and unusual spending patterns. Any cash withdrawals via digital currency should also attract more attention, the letter states.

If necessary, the suspicious transactions must be blocked and the information about this must be passed on to the Federal Financial Control Service (Rosfinmonitoring).

Special measures to limit the outflow of foreign currency were: issued in the early days of the war in Ukraine and the resulting economic sanctions. They include limiting Russian citizens’ foreign currency transactions to $5,000, as well as a $10,000 cash cap for those traveling abroad. Buying real estate, securities and other assets from residents of “unfriendly” jurisdictions requires government approval.

The Vice-President of the Russian Banking Association, Aleksey Voylukov, explained to journalists that the CBR’s recommendations are intended to prevent the proliferation of schemes to circumvent the imposed limits, especially through crypto exchanges.

The news comes as no surprise, as more than 10 million Russian citizens together to hold about 5 trillion rubles ($63 billion) in crypto. With their Visa and Mastercard cards disabled and their own government imposing harsh restrictions on transactions, many Russian citizens are left with crypto as the only option to move their money.

Despite the widespread stories of Russian oligarchs trying to hide their wealth, it is ultimately ordinary people who rely on the digital asset infrastructure amid skyrocketing inflation and the tightening of government monetary control.

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