Crypto-backed accounts to be frozen in Russia

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There are indications that Russia has perfected plans to place a ban on crypto-backed accounts in the country. Reports have it that the Russian central bank has rolled out new regulations in a new Anti-Money Laundering (AML) act to crack down on cryptocurrencies and digital assets. According to the newly amended law, the country apex bank now has the right by law to freeze any crypto-backed account, as cryptocurrency is now part of the criteria for restricting bank accounts. The central bank says it is doing this as part of measures to deal with dubious transactions and money laundering.

Russia’s fear of illegality and fraud?

Before this development, the Russian government had been dilly-dallying about its decision on cryptocurrencies in the country. The country’s law viewed cryptocurrency as a surrogate or monetary substitute and thus prohibited it. In 2017, there were several debates and call on Russia to legalize cryptocurrency. However, the government in Russia said it would ban cryptocurrency as it would be used to launder money and finance terrorism. The Russian authority has warned its citizens from using digital currency as a means of financial exchanges and transactions.

However, cryptocurrency payments have been gaining widespread acceptance in Russia as cryptos have been used in payment exchanges at online stores, cafes, etc. There are equally freelancers who accept bitcoin as a means of payment for work done across the world. These freelancers and other market investors are some of those who possess crypto-backed accounts and at the risk of losing their savings.

Implications of a ban on crypto-backed accounts in Russia

Looking at the effects of the prohibition on crypto-backed accounts, one will observe that the Russian government has made up its mind not to welcome cryptocurrency in its economy. All over the world, cryptocurrency is gaining more popularity. This new legislation and development will also be a surprise to many. The Russian government in 2019, through its Prime Minister, said cryptos are no longer popular or relevant,
but the government has changed its tone.

This ban could also be the beginning of a further crackdown on cryptocurrency owners and holders in the country, as the new legislation and amended law now put the sales and purchase of digital assets as criteria for a ban on crypto-backed accounts.

Featured image by Pixabay.

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Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile freelance writer and researcher on the blockchain space and related matters with published works online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.

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