Association of Russian Banks Wants Ban on Non-Custodial Crypto Wallets

Bitcoin wallets

A letter from the Association of Russian Banks (ADB) to the Central Bank and departments showed that the group wants a ban on non-custodial crypto wallets, Izvestia reported on Monday.

ADB’s Request for Ban on Non-Custodial Crypto Wallets

The Association of Russian Banks (ADB), a non-governmental non-commercial organization that unites commercial banks and other credit organizations, requested in a letter that storing crypto in non-custodial wallets be criminalized.

Non-custodial (self-custody) crypto wallets are wallets that allow investors to fully manage and control their private keys. Accessing a non-custodial wallet without authorization is quite difficult as the person will need access to the owner’s keys or mnemonic seed phrase. 

Anatoly Kozlachkov, ADB vice president, noted that authorized bodies should not forcibly acquire such wallets, but penalize owners of non-custodial wallets who refuse to submit their wallet keys to authorized bodies, the report added.

ADB believes this step will help curb the problem of recovery of crypto owned or stolen by debtors or criminals that are stored in non-custodial wallets. They also expect it will help prevent the outflow of capital through such wallets. 

The association also noted that its proposal will make every crypto user equal, ensuring they pay taxes, and further aid the Bank of Russia and the Ministry of Finance to regulate the circulation of cryptocurrencies in the country.

Reactions from Authorized Bodies

While ADB has sent its proposal to various authorized bodies such as the Bank of Russia, the Ministry of Finance, and the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring), no actionable decision has been made.

Per the report, Rosfinmonitoring believes the proposal deserves attention while the Ministry of Finance said they were yet to receive the letter, but are ready to consider it in the stipulated manner. The Bank of Russia, on the other hand, declined to comment on the matter.

The expert council of the State Duma working group on the regulation of cryptocurrencies also received the letter, but a number of officials and market participants raised an eyebrow on the concept of the proposal.

Andrei Lugovoy, Deputy Head of the Working Group, said that he understood the concerns ADB has about the issue, but the approach they’re giving will only hinder the legalization of the market.

Crypto Should Be Regulated, Not Banned

According to a report in January, Ivan Chebeskov, the department director of the Russian Finance Ministry, suggested that it would be better to regulate crypto than ban it.

Chebeskov backed up his recommendation by preparing the concept for regulation of the crypto market and sent it to the government office for review.

Meanwhile, Russia is closer to regulating Bitcoin and other cryptocurrencies as a form of legal currency.

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