Industry experts reveal possible method for Bank of Russia to block crypto

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Amid continued uncertainty over the future of cryptocurrencies in Russia, a local industry executive has revealed a potential method for the Bank of Russia to block crypto transactions.

Andrey Mikhaylishin, CEO of local crypto payments startup Joys, said the Russian central bank is now considering several potential options to make its crypto ban possible, Forbes Russia reported on Friday.

One of the possible restriction methods is to block debit card payments to crypto exchanges or wallets using Merchant Category Codes (MCCs), Mikhaylishin said. The report notes that the executive became aware of this method of blocking by employees of the Bank of Russia.

MCC codes are four-digit numbers used by credit card processors like Visa or Mastercard to describe the primary business activities of a merchant. For example, crypto transactions are usually identified with the MCC code 6051, while payments in grocery stores have the MCC code 5411. According to the report, the Bank of Russia could force local banks to simply prohibit transactions with the MCC code. 6051.

While the potential plan is apparently still under discussion in Russia, some industry figures have questioned the effectiveness of such a strategy.

Maria Stankevich, a member of the Russian Committee on Blockchain Technologies and Cryptoeconomics, told Cointelegraph that the potential MCC-based restrictions would trigger the departure of transparent companies from the country without affecting illegal crypto exchanges:

“I am 100% sure that if they ban transfers to cryptocurrency with the correct MCC then honest exchanges will exit the market in the first place. There will be gray crypto exchanges left, which will do what is called bad coding, using other codes for transactions. “

Stankevich has suggested that the wrong coding penalties at providers like Visa are insufficient for illegal crypto exchanges to shut down. As previously reported, there are several gray crypto companies in Russia, at least 50 of which are located in the city of Moscow, a financial district in the Russian capital.

The executive also expressed optimism about the cryptocurrency industry in Russia, pointing out that the Bank of Russia is essentially the only regulator that opposes the adoption of crypto in the country:

“We’ve always known that the central bank is against crypto and wants it to be banned, but I still don’t think that will be the way for Russia to go, as the central bank is in the minority there.”

Related: Bank of Russia Governor: Banning Crypto In Russia Is ‘Completely Doable’

“I personally know many senior officials in Russia who understand the importance of cryptography,” 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 crypto. Another bank executive later claimed that the Russians will only be able to invest in cryptocurrencies like Bitcoin (BTC) through foreign companies.

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