Amidst the ongoing uncertainty about the future of cryptocurrencies in Russia, a local industry executive has revealed a possible way for the Bank of Russia to block crypto transactions.
Andrey Mikhaylishin, CEO of local crypto payment startup Joys, said the Russian Central Bank is now studying several potential options to make the crypto ban possible, Forbes Russia reported on Friday.
Mikhaylishin said that one possible method of restriction includes blocking debit card payments to exchanges or crypto wallets using Merchant Class Codes (MCC). The report notes that the executive learned about this blocking method from Bank of Russia employees.
MCC codes are four-digit numbers that credit card processors such as Visa or Mastercard use to describe a merchant’s primary business activities. For example, crypto transactions are typically identified with the 6051 MCC code, while payments at grocery stores have the 5411 MCC code. According to the report, the Bank of Russia could simply require domestic banks to block transactions using the 6051 MCC code.
While the potential plan is apparently still being discussed in Russia, some industry figures have questioned the effectiveness of this strategy.
Maria Stankevich, a member of the Russian Committee for Blockchain Technologies and Cryptoeconomics, told Cointelegraph that the potential restrictions based on the MCC would lead to transparent companies leaving the country while not affecting illegal crypto exchanges:
“I am 100% sure that if they block cryptocurrency transfers with the correct MCC, honest exchanges will leave the market in the first place. There will remain gray crypto exchanges, which will do the so-called false cryptography, using other codes for transactions.”
Stankevich suggested that wrongful penalties on service providers such as Visa are not enough for illegal cryptocurrency exchanges to stop their operations. As mentioned earlier, there are many gray crypto companies in Russia, of which at least 50 are located in the city of Moscow, which is a financial district of the Russian capital.
The CEO also expressed optimism about the cryptocurrency industry in Russia, noting that the Bank of Russia is essentially the only regulator opposed to cryptocurrency adoption in the country:
“We have always known that the central bank is against digital currencies and wants to ban them, but I still don’t think that would be the way for Russia because the central bank is in the minority there.”
Related: Bank of Russia Governor: Banning Cryptocurrency in Russia ‘Completely Possible’
“I personally know many high-ranking officials in Russia who understand the importance of cryptocurrencies,” Stankevich added.
This news comes after Bank of Russia Governor Elvira Nabiullina announced the bank’s intention to ban the domestic financial system from using cryptocurrencies. Another bank executive later claimed that Russians would only be able to invest in cryptocurrencies such as Bitcoin (BTC) through foreign companies.