The State Duma tightens control: banks will gain the right to block suspicious crypto transfers
The State Duma Committee on the Financial Market has presented an updated version of the bill "On Digital Currency and Digital Rights" for the second reading. The key change is a radically new mechanism for blocking transactions related to the illegal circulation of cryptocurrencies, which transfers significant powers to banks.
The original version provided for the creation of two state registers: one for legal entities and individual entrepreneurs organizing the circulation of cryptocurrencies outside the legal framework, and the second for foreign payment providers servicing such violators. By the second reading, this structure has been completely abolished.
Instead of registers, the concept of an "unauthorized recipient" is introduced. This is a recipient of funds against whom the bank has suspicions of organizing the circulation of digital currencies without the appropriate legal status in Russia. Critically, the bill does not establish clear criteria for such suspicions and does not assign this task to the Bank of Russia. Each financial institution will develop its own criteria and enshrine them in internal documents. This creates grounds for subjective and opaque decisions.
Banks are required to transmit information about identified "unauthorized recipients" to the Central Bank. In response, the regulator can only provide data on foreign payment providers servicing transfers in their favor. The law does not provide for the publication of this information, raising questions about the transparency of the entire system.
Who should block transfers and what exceptions exist
Payment agents, telecom operators, and participants of the digital ruble platform are excluded from the blocking mechanism. The obligation to refuse transfers is placed on credit institutions, branches of foreign banks, and payment card issuers. The bank must immediately notify the client of the refusal in the manner prescribed by the contract. However, the procedure for notifying the "unauthorized recipient" themselves and the mechanism for challenging the blocking are absent from the document.
The law provides for three exceptions when the bank is not obliged to refuse the transfer:
- the transaction is related to a foreign trade contract;
- the transfer is carried out on behalf of an organization legally exchanging digital currency;
- the transaction is conducted on behalf of a broker or trustee with permission from the Bank of Russia.
The State Duma plans to consider the bill in the second reading on July 21. Let me remind you that earlier, First Deputy Chairman of the Central Bank Vladimir Chistyukhin set the date for the law to come into force as September 1.
Analyst's comment: Granting banks the right to independently determine "suspicious" recipients is a step towards decentralized control, which carries serious risks for bona fide market participants. The lack of uniform criteria and a mechanism for challenging blockings could lead to arbitrary decisions and pressure on legitimate crypto businesses, which is unlikely to contribute to the formation of a civilized digital asset market in Russia.