Russia to Monitor Cross-Border Crypto Transactions to Curb Illegal Transfers

The Bank of Russia plans to monitor all cross-border cryptocurrency transactions over the next six months, involving 19 major banks such as Citibank, MTS Bank and Raiffeisenbank.

These banks will report detailed information on the parties involved, the transaction methods and the payment systems used. The aim is to regulate illegal transfers and control capital flows as Russia increases its focus on international crypto payments and reduces its reliance on the US dollar.

Kristina Mkrtchyan of the Moscow Digital School noted that this data could help control illegal transactions, although experts question its accuracy due to the prevalence of peer-to-peer (P2P) transactions.

In July 2024, Russia approved the use of cryptocurrencies for international payments, reversing its previous stance as tensions with the US escalated. The country is exploring the possibility of regulated cross-border digital payments to avoid Western sanctions.

Meanwhile, Russia has accelerated the development of its digital ruble, aiming for mass adoption by 2027. It also plans to create stablecoins linked to the Chinese yuan and BRICS currencies, as well as two new crypto exchanges in Moscow and St. Petersburg.

The Bank of Russia has assured that the digital ruble will not affect inflation as it changes the money structure from cash to digital, keeping the supply constant. However, inflationary pressures have risen due to the ongoing conflict with Ukraine, prompting the central bank to raise interest rates from 18% to 19% in September 2024.