The Association of Banks of Russia has proposed that lawmakers ban self-custody wallets

The Association of Banks of Russia, an NGO representing the interests of the Russian banking and financial community, has reported that lawmakers have banned the storage of cryptocurrencies outside of unattended wallets on centralized exchanges.

Russia banks want to ban self-custody crypto wallets

Russia’s banking community doesn’t want users to keep their cryptocurrency. Accordingly, the Association of Russian Banks reported that lawmakers criminalize self-custodial crypto wallets to mitigate “serious problems” with recovering and seizing cryptocurrencies from debtors and criminals. The news agency cited a letter that the Association has reportedly sent to the Central Bank of Russia, the Ministry of Finance, and the Federal Financial Supervisory Service of the Russian Federation for review.

Noncustodial or self-custodial wallets provide users with direct and absolute ownership of their crypto assets instead of custodial wallets where third parties such as centralized exchanges are trusted, ideal for keeping the user’s private key. If properly secured, a self-custodial wallet makes it impossible for anyone but the owner to transfer crypto-assets in it.

According to the banking association’s vice president Anatoly Kozlachkov, the regulatory framework developed jointly with the Ministry of Internal Affairs originally proposed criminalizing self-custody. However, despite this approach seeming “more logical,” Kozlachkov added that the Association was now leaning towards a softer approach that would not criminalize the possession of crypto in self-custody wallets but the refusal to provide the private keys to authorized bodies. If a debtor or a criminal is linked to their self-custody wallet, they would be given a choice: either surrender the private key or face punishment for hiding property in the form of digital assets.

According to the banking association’s report, Russia wants to create a “closed” crypto-economy within its borders, which, according to the banking association, is impossible without implementing an appropriate system. suitable for confiscation of assets held in unattended wallets. The country is currently evaluating two opposing approaches, one led by the Central Bank of Russia, which proposes a comprehensive ban on all cryptocurrency use and mining. Another, backed by the Ministry of Finance, seeks to regulate cryptocurrencies within the existing financial system.

Despite many calls to ban cryptocurrencies or hinder the Russian banking community from accepting them, the Russian government seems to favor a more measured approach by the Ministry of Finance and is leaning towards regulation rather than regulation. Prohibited property type.

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