Prevent capital flight at all costs – Following economic sanctions unprecedented measures taken by part of the international community, the Russian economy is faltering. A debt default is on the table as a huge recession looms. Some thought that Bitcoin and the cryptocurrencies could be a means of escaping this flurry of sanctions. But all is not so simple. To limit the exodus of funds, the Central bank Russian (CBR) increases the pressure on its constituents and controls their every move. Back In USSR sang the Beatles… we are not far from it.
Banks have an obligation to monitor their customers
In a letter dated March 16, Yuri Isaev – CBR Vice President – asks the banks to strengthen the control of their customers’ transactions. This information was published by the Russian daily Vedomosti. It is a reference in the world of business and finance in Moscow. In essence, financial institutions must pay particular attention to any legal or natural person who attempts to withdraw assets to certain countries. The latter, known as “hostile” or “non-friendly”, bring together more than 48 nations including the United States, Great Britain and all the countries of the European Union.
” Atypical behaviors“, “ abnormal activities “will be” listed, reported and controlled“. All attempts to circumvent newly imposed bank restrictions must ultimately be “ stopped“. All of the transactions called ” suspicious » will be declared to the Rosfinmonitoring, the Federal Anti-Money Laundering Service – the Russian equivalent of Tracfin. All under cover of the anti-money laundering law FZ-115. The risks involved are enormous. Russian justice is particularly strict about this lately. It provides for heavy fines and even criminal liability. So much for the legal framework.
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Bitcoin and cryptocurrencies are not even a solution anymore
In fact, these new directives reinforce the first measures taken from the first days of the crisis. And cryptocurrencies are once again coming into the debate as an exit option.
” Central Bank recommendations aim to prevent ‘growth’ of schemes to circumvent restrictions, withdraw funds through cryptocurrency exchanges »
Alexei Voylukov, Vice President of the Association of Banks of Russia – Source: Vedomosti
Near 10 millions Russians hold $63 billion in cryptos on the different platforms. The authorities know this and their concerns seem justified. With the suspension of payment cards and then record inflation, cryptos are clearly becoming a Plan B for Russian citizens. This is to make transfers, purchases or protect their savings. Unfortunately the new deposits on the platforms seem to be compromised. The international media seem to be obsessed with stories of Russian oligarchs and their boats being seized around the world, but in reality it is mostly “normal” people who are paying the heaviest price for this situation.
” Russia is not in Moscow, it is in the hearts of its children”. Thus spoke a character in War and peace, Leo Tolstoy’s masterpiece. War mainly impacts the little people who suffer the consequences. And this on both sides of the front line. More than aware of the absolute drama that the Ukrainian population is going through, we cannot eclipse the difficulties of Russian families in the face of the deprivations to which they are subjected. Will bitcoin and cryptos be able to alleviate the ills of civilian populations? Some like President Zelensky firmly believe in it. We can only hope, or like John Lennon, imagine.
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