Amid the current uncertainty about the future of cryptocurrencies in Russia, a local industry executive has revealed a possible method for the Bank of Russia to block cryptocurrency transactions.
Andrey Mikhaylishin, CEO of the local cryptocurrency payments startup Joys, said the Russian central bank is now considering several potential options to make its cryptocurrency ban possible, Forbes Russia reported on Friday.
One of the possible restriction methods includes blocking debit card payments to cryptocurrency exchanges or wallets using merchant category codes (MCC), Mikhaylishin said. The note indicates that the executive learned of this blocking method through employees of the Bank of Russia.
MCC codes are four-digit numbers used by credit card processors such as Visa or Mastercard to describe the main business activities of a merchant. For example, cryptocurrency transactions are usually identified by the code MCC 6051, while payments in grocery stores have the code MCC 5411. According to the report, the Bank of Russia could force local banks to simply ban transactions under the MCC 6051 code.
Although it appears that the possible plan is still being debated in Russia, some industry figures have questioned the effectiveness of such a strategy.
Maria Stankevich, member of the Russian Committee for Blockchain Technologies and Cryptoeconomics, told Cointelegraph that The potential restrictions based on the MCC would cause transparent companies to leave the country, while not affecting illegal cryptocurrency exchanges:
“I am 100% sure that if they prohibit transfers to cryptocurrencies with the correct MCC, then the legal exchanges will leave the market in the first place. There will be the gray exchanges, which will do the so-called miscoding, using other codes to make transactions.”
Stankevich suggested that using different codes at providers like Visa is insufficient for illegal exchanges to stop their operations. As we already told you before, there are several crypto companies in Russia operating underground, with at least 50 of them located in the city of Moscow, a financial district in the capital of Russia.
The executive also expressed optimism about the cryptocurrency industry in Russia, noting that the Bank of Russia is essentially the only regulator that is against the adoption of cryptocurrencies in the country:
“We have always known that the central bank is against cryptocurrencies and wants them to be banned, but I still don’t think this is the way for Russia, because the central bank is in the minority there.”
“I personally know many high-ranking officials in Russia who understand the importance of cryptocurrencies,” Stankevich added.
The news comes after Bank of Russia Governor Elvira Nabiullina announced the Bank’s intention to prevent the local financial system from using cryptocurrencies. Another bank executive later stated that Russians will only be able to invest in cryptocurrencies like Bitcoin (BTC) through foreign companies.
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