On Tuesday August 4, the Russian Federation enacted a ban on anonymous deposits to online wallets. This move is expected to affect 10 million digital wallet users across the nation. Russian lawmakers explained that the initiative aims to curb illegal activities, including financing terrorist activities and trading in illegal drugs. While cryptocurrencies have a lot of legitimate uses, they have been favored for illegal activities for a long time because of their anonymity. This is also the case for the digital wallet services.
The digital wallets covered by this new ban include Kiwi, PayPal, WebMoney and Yandex services. They are all popular in Russia. Across these four services, more than 10 million users have accounts. They top them off anonymously with fiat currency. Some of the users have the wallets for the sole purpose of buying cryptocurrencies, but the number of those users in the Russian Federation is not known at this time.
A Russian economist, Antonina Levashenko, thinks that these rules will initially have a minimal impact or even no impact on the use of blockchain in the Russian Federation. While Russia works on strengthening its anti-money laundering rules, this current ban could also be applied to digital currencies. If that takes place, then there could be a bigger impact.
The cryptocurrency exchange business called EXMO is at the forefront of these developments. The exchange's business development manager is Maria Stankevich. She believes that the new ban on anonymous wallets in the Russian Federation could have an impact on the small set of cryptocurrency exchanges that do not currently take compliance with the government rules seriously. Her take on it is that the demand for such online wallet access could quickly drop as a result of the new rules and regulations.
In another recent development, Russia's Parliament voted for a cryptocurrency bill that sets new general rules around the industry as a whole. Once the bill goes into effect as law, it will be less severe than what the original version entailed. Russia is a growing player in cryptocurrency, and investors and analysts will be watching these developments closely.