Moscow's crypto tagging plan runs into Western sanctions wall

The Bank of Russia wants to introduce labeling for cryptocurrencies to trace criminally obtained coins. Bogan Shablya, head of the central bank's financial monitoring service, floated the idea at the XXIII International Banking Forum.

Market voices were quick to point out the practical headaches. Sergey Mendeleev of Exved and Garantex reacted with open sarcasm, while Cartesius lawyers and analyst Viktor Pershikov noted that the domestic “Transparent Blockchain” system has been running since 2021 and already covers over 30 assets.

The real snag lies in clashing with Western analytics. Tools like Chainalysis, Elliptic and Crystal operate as extensions of US sanctions enforcement through OFAC, as seen when Tether froze USDT tied to Garantex addresses. Russian labels alone won't override those flags.

Sticking only to the local system could cut Russian crypto off from global platforms. Adopting foreign providers, however, would import their full sanctions logic, treating any Russia-linked activity as high risk. The regulator aims to issue the first licenses by the end of 2026.

Based on information from https://cryptonews.net