The State Duma’s Financial Market Committee has revised the draft law “On Digital Currency and Digital Rights” for its second reading. The new version proposes changes to the mechanism for blocking transfers related to the illegal circulation of cryptocurrencies.
The initial draft of the bill proposed two registries to be maintained by an authorized body:
- the first for legal entities, individual entrepreneurs, and foreigners organizing cryptocurrency circulation bypassing legal market participants;
- the second for foreign payment providers servicing transfers to those listed in the first registry (excluding foreign banks).
For the second reading, both lists were removed. Instead, the concept of an “unauthorized recipient” was introduced. This refers to a recipient of funds whom a bank suspects of organizing digital currency circulation without the status of a legal market participant in Russia.
The bill does not define suspicion criteria nor assign this task to the Bank of Russia. Each financial institution will establish these criteria independently in their internal documents.
Banks will report information about “unauthorized recipients” to the Central Bank. In response, the regulator can only provide data on foreign payment service providers that facilitate transfers to them. The bill does not require the publication of this information.
Who Will Deny Transfers
For the second reading, payment agents, telecom operators, postal service operators, and the digital ruble platform operator and participants were removed from the mechanism. The obligation to deny transfers remains with credit institutions, branches of foreign banks, and payment card issuers.
Banks must immediately notify clients of a denial in the manner specified in the contract. However, the document does not include procedures for notifying the unauthorized recipient or contesting the block.
Banks are not required to deny a transfer in three cases:
- the operation is related to a foreign trade agreement;
- the transfer is made on behalf of an organization exchanging digital currency;
- the transaction is on behalf of a broker or trustee, if permitted by the Bank of Russia.
The State Duma plans to consider the bill in its second reading on July 21.
Earlier this month, First Deputy Chairman of the Central Bank Vladimir Chistyukhin stated that the law regulating the crypto market in Russia will come into effect on September 1.
