The MCC crypto limits imposed by the Bank of Russia are unlikely to affect exchanges that have been operating unlawfully in the past.
A local industry leader has revealed a potential mechanism for the Bank of Russia to ban crypto transactions, amid the continuous uncertainty regarding the future of cryptocurrencies in Russia.
According to Forbes Russia, Andrey Mikhaylishin, CEO of local crypto payment firm Joys, the Russian central bank is reportedly studying numerous potential approaches to make its crypto ban conceivable.
Blocking debit card payments to crypto exchanges or wallets using merchant category codes (MCC) is one of the conceivable restriction ways, according to Mikhaylishin. According to the article, the executive learned about the blocking method via Bank of Russia personnel.
MCC codes are four-digit numbers that credit card processors like Visa and Mastercard use to describe a merchant’s main business activities. The 6051 MCC number, for example, is used to identify crypto transactions, whereas the 5411 MCC code is used to identify payments at food stores. The Bank of Russia, according to the article, might force local banks to simply prohibit transactions involving the 6051 MCC code.
While the proposed plan appears to be still under consideration in Russia, some industry insiders have questioned its effectiveness.
According to Maria Stankevich, a member of the Russian Committee on Blockchain Technologies and Cryptoeconomics, prospective MCC-based limitations would drive transparent enterprises out of the country while leaving illegitimate crypto exchanges alone:
“I am 100% sure if they prohibit transfers to cryptocurrency with the right MCC, then honest exchanges will leave the market in the first place. There will remain grey crypto exchanges, which will do so-called miscoding, using other codes for transactions.”
Stankevich believes that miscoding penalties imposed by providers like as Visa are insufficient to bring unlawful crypto trading to a halt. As previously reported, Russia has a number of grey crypto firms, with at least 50 of them based in Moscow City, the country’s financial centre.
The executive also voiced confidence about the cryptocurrency market in Russia, noting that the Bank of Russia is the country’s lone regulator who opposes crypto adoption:
“We have always known that the central bank is against crypto and wants it to be banned, but I still don’t think that this will be the way for Russia because the central bank is in the minority there.”
“I personally know many high-ranking officials in Russia that understand the importance of crypto,” Stankevich added.
The announcement comes after Bank of Russia governor Elvira Nabiullina stated that the bank intends to prohibit the use of cryptocurrency in the Russian banking system. Russians will only be permitted to invest in cryptocurrencies like Bitcoin (BTC) through foreign corporations, according to another bank executive.
