A legislative initiative aimed at regulating digital currencies has undergone significant changes. The State Duma Committee on the Financial Market has finalized the draft law "On Digital Currency and Digital Rights" for the second reading. The key innovation is the simplification of the mechanism for blocking transfers that banks consider related to the illegal circulation of cryptocurrencies.
The original version of the document proposed maintaining two registries: the first would include legal entities, individual entrepreneurs, and foreigners organizing the circulation of cryptocurrency outside the legal framework, and the second would include foreign payment providers servicing such individuals. However, both lists were excluded for the second reading. Instead, the concept of an "unauthorized recipient" is introduced. This is a recipient of funds regarding which the bank has suspicions of organizing the circulation of digital currencies without the appropriate status in Russia.
Importantly, the draft law does not define the criteria for such suspicions and does not assign this task to the Bank of Russia. Each financial institution will develop them independently, enshrining them in internal documents. This creates a broad field for discretionary enforcement, which, in my opinion, could lead to opacity and unpredictability for market participants.
Banks will be required to transmit information about "unauthorized recipients" to the Central Bank, and the regulator, in turn, will be able to provide them with information about foreign payment service providers servicing transfers in favor of such individuals. The draft law does not require this data to be published, which reinforces the element of system secrecy.
Who will refuse transfers
Payment agents, telecom operators, postal operators, as well as the operator and participants of the digital ruble platform, are excluded from the mechanism. The obligation to block transfers remains with credit institutions, branches of foreign banks, and payment card issuers.
The bank is obliged to immediately notify the client of the refusal in the manner prescribed in the contract. However, the procedure for notifying the "unauthorized recipient" themselves and the mechanism for challenging the blocking are absent from the document. This creates a risk for bona fide market participants who may face unjustified restrictions.
The bank is not obliged to refuse a transfer in three cases: if the transaction is related to a foreign trade contract, the transfer is carried out on behalf of an organization exchanging digital currency, or 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 draft law in the second reading on July 21. Let me remind you that earlier the Central Bank stated that the law on regulating the crypto market would come into force on September 1.
Cryptalist Analytics: These changes represent a step towards stricter control, but with vague criteria. The lack of clear definitions of "suspiciousness" and an appeal mechanism could lead to overreach at the local level. The market should prepare for banks, fearing risks, to block transactions based on subjective assessments, which in the short term will create additional tension for legitimate crypto participants.