Russia bans cash deposits to anonymous online wallets

Illegal financial activities are some of the most common issues the governments of different countries have to face and that is why there are more and more new ways and methods of dealing with this issue used by authorities in order to combat this form of illicit activity. Russia is none of the exceptions and is a hub of financial scams. And now the government of Russia decided to impose a ban on all cash deposits on anonymous electronic wallets and that is its latest move towards pushing illegal financial activities, terror financing, and drug trades to curb. Ewallets and Bitcoin have become a very useful weapon for spies and scammers in Russia but now they will come in handy for the government for once.

Electronic wallets have become quite a popular payment method for millions of people who use it for all sorts of different reasons including purchasing items, gambling, etc. According to a news piece published by a local news publication RBC, the new law will have an impact on about 10 million Russians who are currently using online wallets such as Yandex. Money, QIWI-Wallet WebMoney, PayPal, VK Pay, and a lot of others. In an interview with the same  publication, a representative of the country’s central bank stated: “These changes have been made in order to minimize the risks of transactions with anonymous cards and electronic wallets.”

As a part of the new law, all the cash deposits on these platforms will be ceased which will leave users with only one option, to make top-ups with bank transfers. This means that they will have to identify themselves by linking bank accounts. This is also helpful to the process of limiting illicit financial activity by allowing authorities to have a look at the sources of the funds. This law also covers transport and travel cards and people now need to make online transactions for sending money to metro cards.

And even though the law that came as an amendment to the national payment system was passed by the State Duma last year, the law was only imposed after a year in order to make sure that business processes have adapted with no flaws.

At the same time, while the law doesn’t actually have any direct effect on cryptocurrencies, a lot of experts believe that this change in the nation’s payment system will have a huge impact on the digital currency and crypto transactions. But on the other hand, some people are optimistic and think that this will only extend to the exchanges and wallets that are not compliant with Russian laws.

This might also take a toll on all the people using e-wallets to purchase online currencies. A recent survey, conducted in order to find out just how many people use cryptocurrencies in Russia showed that over 13% of the population uses online currencies. And even though this doesn’t seem like a huge percentage it is still a lot compared to the number of people using more or less traditional payment methods. And at the same time, more and more Russians are getting interested in how to purchase rubles with bitcoin and how this relatively new payment system works. This is shown by the number of Google searches regarding how to use Bitcoin in Russia and there has been a 220% spike in searches regarding the said topic.

Meanwhile, Russia also enforced a new law recently which has already been signed by President Vladimir Putin. This law has been brought in order to clarify Russia’s stance and position regarding cryptocurrencies. The law sees digital assets as property and bans their usage as a mode of payment. This law also had a huge impact on the users of cryptocurrencies and with all these major changes regarding financial activities, the citizens of Russia have to adjust to the new reality and make sure they are ready to face some more changes too as the battle between the government and illicit financial activities is definitely not over.

Sources:

https://forexbrokerslist.org/europe/russia/

https://www.nytimes.com/2018/07/13/technology/bitcoin-russian-hacking.html

https://news.bitcoin.com/poll-shows-13-of-russians-use-cryptocurrency-for-online-purchases/

https://fintechzoom.com/fintech-news/cryptocurrency-news/cryptocurrency-regulation/