Russian Electronic Money and Remittance Association is a think tank focused on financial regulation and retail financial technologies. There is so much that is happening in the Russian payment market right now but most news never make it to the foreign mass media. We decided to share the most important developments in the short digest, every two weeks. Here is our first release of “Meanwhile in Russia”.
Meanwhile in Russia 08/02/2018
▪ Russian financial regulators are (again!) discussing measures to be taken against anonymous payments. Public authorities seek to inhibit the use of anonymous electronic payment facilities that are excluded from KYC. At the moment, low-risk payments such as electronic wallets that allow payments for goods and services below 15000 rubles (approx. 263 USD) threshold (and less than 40000 rubles (approx. 702 USD) a month) are exempted from KYC.
Crackdown on non-personified payments comes in the wake of the FATF mutual evaluations in 2018 - although, FATF Recommendations allow exemptions of low-risk transactions from KYC requirements. Experts say that balance between financial inclusion and personification should be taken into account, otherwise the ban will result in the growth of cash usage. Previously, similar regulatory initiatives were supplemented by the introduction of simplified CDD procedures. Hopefully. Something similar will happen this time again.
▪ Russian Ministry of Finance published a draft bill “On digital assets”. The document contains definitions of tokens and ICO as well as specifies the legal status of cryptocurrencies and their mining. But this is just a draft - and the disputes over cryptocurrencies’ status in Russia continue. The Central Bank has more conservative stance and argues that digital currencies are not guaranteed by any state and as such their processing can cause serious negative risks. The First Deputy Governor of the Bank of Russia Olga Skorobogatova explained: “We offer to allow mining within the territory of the Russian Federation. For us, it is a kind of activity that can be supported…At the same time, the question of how the miners will exchange what they have mined is still debatable. We, as the Bank of Russia, believe that they still have to do this outside the territory of Russia”. Ministry of Finance fears that banning cryptocurrencies altogether can lead to financial crimes and tax evasion. In short, this debate is going to be hot.
▪ The new mobile application for recognition of counterfeit notes developed by the Russian Mint is now available in popular appstores. The app will help to define authenticity of new 200 rubles or 2000 rubles’ notes and has VR functionality. Purpose of the app is to increase customers' trust in new bills, although statistically the risks of getting a fake note are on the decline: according to the latest data, number of counterfeit notes has decreased by 15% last year in Russia. The news came after the launch of a wide public campaign to raise awareness about the new banknotes. Governor of the Bank of Russia Elvira Nabiullina took an active part in the campaign starring in the viral music video adevrtising the banknotes.