Just Two Months Prior To The License, Russia’s Central Bank Declared That Cryptocurrency Trading, Mining, And Usage Should Be Banned

Russia’s central bank has granted Sberbank, the country’s biggest retail bank, a green light to issue and exchange digital assets, which means Sberbank can now issue digital financial assets and exchange them on its platforms. Companies can now issue digital assets using Sberbank's proprietary platform, proving cash requirements which will, in turn, enable them to attract market investments. Furthermore, companies may also decide to buy digital assets with funds lying idle in order to generate income.

Sergey Popov, director of Sberbank's Transaction Business Division, noted that the companies will be able to make their first transaction using Sberbank’s blockchain in less than a month. “We are just starting our work with digital assets, realizing that further development requires adaptation of the current regulatory framework. To do that, we are ready to work closely with the regulator and executive bodies,” Popov added.

Russia’s central bank flips 180 degrees

The move came out of the blue, however, since Russia’s central bank was a deep opponent to digital assets, calling numerous times that cryptocurrency trading, mining, and usage should be banned.

Indeed, the Bank of Russia issued a consultation paper in January, which warned that a possible wider adoption of crypto asses may impose a significant risk for the Russian financial market.

“A further increase in Russians’ cryptocurrency investments and an extensive involvement of banks and other financial institutions in the cryptocurrency market might exacerbate risks inherent in this activity and pose systemic threats,” Bank of Russia stated in its consultation paper.

An exodus for sanctions?

As the war conflict between Russia and Ukraine continues, the western countries have decided to impose unprecedented sanctions against Russia, like the exclusion of several Russian banks from the SWIFT international banking system. The sanctions managed to provoke a seismic drop in the institution’s value earlier in the month, with the London Stock Exchange pausing trading, as the last quoted price for Sberbank’s foreign depository shares reached a low of $0.05 apiece.

Now, Sberbank’s green light for digital asset issuing and usage has been perceived by many as a desperate move towards dodging the sanctions. However, several analysts already stated that crypto can do no good for evading financial sanctions. Furthermore, since the start of the war conflict, Sberbank’s Swiss subsidiary, which entered into a partnership with Geneva-based blockchain start-up Komogo in 2020, was expelled from the Swiss Bankers Association (SBA), along with Gazprombank.

“Swiss banks maintain strict compliance with all applicable regulations and measures, including sanctions imposed by Swiss, international, and supranational bodies. Integrity and reputation are important key factors for the financial center.” SBA announced.

Nevertheless, crypto adoption continues

Despite the war conflict and the imposed sanctions, Chainalysis reported that Ukraine and Russia are among the top 20 countries adopting crypto. Ukraine became the fourth-largest nation in terms of crypto adoption, while Russia secured the 18th spot.

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