- Russia made a progressive step towards crypto regulation.
- The country is currently testing a critical crypto compliance tool.
- Big financial institutions are taking part in the tests.
The Bank of Russia and Rosfinmonitoring (RFM), the country’s financial intelligence body, are building a platform to identify user crypto-to-fiat links amid efforts to develop a comprehensive digital assets regulatory framework.
While speaking at a forum organized by RFM, Inotech Director of Portfolio Management Ilya Bushmelev revealed that the platform is currently undergoing pilot testing by “five large banks.” Inotech is RFM’s technological partner in creating the Transparent Blockchain, Russia’s tool for analyzing crypto transactions.
“Know Your Crypto Client” Pilot
According to an April 25 report by local news outlet RBC, Bushmelev stated that the five large banks, including credit institutions, will continue testing the platform until the end of May this year. The results of this testing are expected to lay the foundation for effective crypto regulation in Russia.
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“Based on the results of the pilot, a basic understanding of the necessary actions and tools for credit institutions in terms of conducting crypto-compliance, the “Know Your Crypto Client” and “Know Your Crypto Transaction” procedures should be formed.” Bushmelev stated at the forum.
Rosfinmonitoring chief Alexander Kuryanov noted at the same forum that financial institutions are now testing “scenarios for connecting the client’s fiat transactions with his transactions in the non-fiat circuit.”
Per Kuryanov, this will allow authorities to develop certain “methodological approaches” and recommendations that can be referred to as “regulatory,” reflecting Russia’s ongoing efforts to navigate the complexities of crypto oversight.
With effective regulation in the crypto landscape, Russia can improve its assessment by the FATF, the International Anti-Money Laundering Task Force. In February, the FATF downgraded one of Russia’s ratings due to shortcomings in digital assets oversight.
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