The Russian State Duma is implementing a new bill to enhance anti-money laundering measures for the digital ruble platform. According to the State Duma Committee on Financial Markets, this bill will allow banks to block suspicious transactions and will come into effect on January 1, 2025. The bill was first submitted in early March by deputies and senators headed by Anatoly Aksakov. This step is a continuation of modernizing the Russian Federation’s financial system by introducing the digital ruble.
The bill proposes a multi-tiered AML framework for the digital ruble platform. It targets financial criminals in three ways. The system is complemented by an important place taken by the Central Bank of Russia. The bank’s direct task is to enforce anti-money laundering regulations and supervise accounts and transactions. The users will be divided into three risk categories. If any of these forms of unlawful activity are suspected, the Central Bank can freeze the funds. Where there is a high-risk concern, the Central Bank must blackout the accounts of the said entities when requested by Rosfinmonitoring, the country’s financial monitoring agency.
Russia Set to Control Digital Ruble Transactions with New Bill
The bill also states that any credit institution that wants to operate on the digital ruble platform must exercise client identification. Moreover, it will pass such information to the Central Bank. Any institutions in breach of the anti-money laundering laws stand to have their banking licenses withdrawn. This robust approach enhances credibility on the platform to reduce incidences of money laundering or terrorism financing.
Analysts pointed out that the new AML/CFT framework will facilitate the legitimate circulation of the digital ruble. The system to prevent the misuse will have the Central Bank’s broad powers to freeze funds, reject transactions, and even shut off accounts. Like their traditional financial counterparts, banks will also employ procedures when they detect and report suspicious activity.
Overall, the bill’s transparency and regulation components intend to remove the digital ruble’s appeal to unlawful uses. The Russian government plans to ‘take over’ the digital ruble to track and control all transactions and minimize its appeal to criminals.
