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

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In the midst of the ongoing uncertainty about the future of cryptocurrencies in Russia, a local industry leader has revealed a possible mechanism for the Bank of Russia to restrict crypto transactions.

According to Andrey Mikhaylishin, CEO of local crypto payment company Joys, the Russian central bank is apparently considering a variety of options to make its crypto prohibition a reality.

According to Mikhaylishin, one possible limitation method is to block debit card payments to crypto exchanges or wallets using merchant category codes (MCC). The CEO learnt about the blocking approach from Bank of Russia employees, according to the paper.

What are MCC codes?

MCC codes are four-digit numbers used by credit card processors such as Visa and Mastercard. In order to describe a merchant’s primary business operations. For example, the 6051 MCC code is in use to identify crypto transactions. Whereas the 5411 MCC code is used to identify payments at grocery stores. According to the article, the Bank of Russia may force local banks to simply reject transactions with the 6051 MCC code.

The suggested proposal appears to be still being under consideration in Russia. However, some industry insiders have raised concerns about its efficacy.

According to Maria Stankevich, a member of the Russian Committee on Blockchain Technologies and Cryptoeconomics, potential MCC-based limitations would drive transparent businesses out of the country while having no effect on illegal crypto exchanges:

“Honest exchanges would exit the sector if they limited transfers to bitcoin with the correct MCC. Grey cryptocurrency exchanges will continue to exist, miscoding transactions with different codes.”

Russia has a slew of grey cryptocurrency businesses

According to Stankevich, miscoding fines at providers like Visa are insufficient to stop illegal crypto trades. As previously reported, Russia has a slew of grey cryptocurrency businesses. At least 50 of which are in Moscow City, the country’s financial hub.

The executive also expressed confidence in Russia’s cryptocurrency economy. Noting that the Bank of Russia is the country’s lone anti-crypto regulator:

“We’ve always known that the central bank opposes cryptocurrency and wants it banned. But I don’t think that will happen in Russia because the central bank is in the minority.”

“I know a number of high-ranking Russian officials who understand the importance of crypto,” Stankevich said.

The announcement comes after Bank of Russia governor Elvira Nabiullina announced that the bank aims to ban cryptocurrency use in the Russian banking system. According to another bank executive, Russians will only be able to invest in cryptocurrencies like Bitcoin (BTC) through foreign firms.

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