The Central Bank of Russia is implementing an advanced centralized monitoring platform to identify and prevent OTC Bit transactions.
According to Bogdan Shablya, Head of Financial Supervision and Currency Control at the Central Bank of Russia, this system will target individuals who lend their bank accounts and cards to conduct Bit-related transactions, copyright-infringing websites, drug stores, and online gambling - commonly referred to as "droppers" or "mules".
According to a report by RBC media, this is Russia's first large-scale coordinated effort to establish a systematic mechanism to control OTC Bit transactions at the banking level. Unlike the traditional approach of monitoring suspicious transactions within individual banks, this new platform will build a centralized database accessible to all financial institutions nationwide.
This move stems from the Russian government's growing concerns, as Bit exchanges are believed to be one of the largest sources using informal banking networks, putting pressure on the national financial system.
The Central Bank of Russia's new monitoring platform marks a sophisticated breakthrough in efforts to reduce or halt the activities of illegal or unmanaged Bit transaction networks. The core of the system is a centralized database designed to track individuals suspected of coordinating these transactions.
These "droppers" often operate multiple bank accounts across different institutions to conduct OTC transactions, making them nearly undetectable through traditional bank monitoring systems. The platform's strength lies in its ability to share real-time data across the entire Russian banking network, creating a unified protective barrier against suspicious activities.
When an individual attempts to open a new bank account, the system will automatically cross-check their information with the central database of identified subjects. The bank will immediately receive alerts about suspicious cases, allowing for preventive measures before the account is misused for illegal transactions.
According to Bogdan Shablya, the system has identified around 700,000 individuals involved in informal transactions. This is a significant step in addressing the loopholes of current monitoring measures, where traders can easily open new accounts at other banks after being detected by one institution.
The scale of illegal banking activities in Russia has far exceeded initial estimates. According to data from the Central Bank of Russia, around 10 million citizens have made transfers to accounts identified as "dropper" cards.
Notably, many of them may not even be aware that they are unwittingly participating in illegal Bit transactions. While suspicious banking activities through corporate accounts have decreased to only 5 billion rubles (50 million dollars) in the first 9 months of 2024, transactions through individual "dropper" accounts have soared to 39 billion rubles (390.6 million dollars) during the same period.
This growth rate is significantly higher than in previous years, with trading volume increasing from 37 billion rubles (370.6 million dollars) in 2022 to 44.9 billion rubles (449.7 million dollars) in 2023. Bank officials attribute this to Bit exchanges, along with online gambling and other digital services, as the primary drivers of this activity.
The deployment of the centralized monitoring platform marks a significant turning point in how Russia approaches the Bit market. By targeting the banking infrastructure supporting OTC transactions, the Central Bank of Russia aims to minimize informal transactions and steer digital asset trading activities through authorized channels.
The immediate impact may force traders to abandon traditional OTC methods relying on the banking system. As this platform makes it more difficult to use individual bank accounts for Bit transactions, traders may be compelled to seek alternative solutions or shift to officially approved platforms.
In the long term, the platform is expected to accelerate the development of managed Bit infrastructure in Russia. However, the Central Bank maintains a cautious stance towards the Bit sector.
Additionally, after making legal adjustments to allow the use of Bit and other Tokens to counter Western sanctions, Russian companies have begun using these Tokens in international payments. Russian Finance Minister Anton Siluanov stated:
"These transactions have already begun to be implemented. We believe that these transactions need to be expanded and further developed. I believe that this will happen powerfully in the coming year."
He also emphasized that the use of Tokens in international payments represents a future trend.
Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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Dinh Dinh
According to Cryptopolitan
