Russia’s central bank granted the country’s biggest lender Sberbank a license to begin issuing digital assets.
Sberbank, the country’s largest retail bank applied for a license back in January with Russia’s central bank to issue its own digital token for corporate clients. In wake of the Ukraine conflict, Sberbank also said it would be pulling out of European markets, as it is currently sanctioned by both the U.S. and European Union.
Although the Bank of Russia has been persistently in favor of banning cryptocurrency, Russian banks must now seek new opportunities to mitigate the effects of Western sanctions.
Sberbank along with financial ecosystem Lighthouse were among the two companies listed on the central bank’s register, giving them permission to issue digital assets and exchange them on their platforms. Blockchain platform Atomyze Russia became the first firm to receive approval to exchange digital assets legally in early February.
Sberbank highlighted how blockchain technology would guarantee the safety of transactions. The bank said it would also allow companies to issue their own digital assets, as well as purchase others within its system.
J.P. Morgan partnership
Sberbank CEO German Gref had said in 2020 the bank would partner with J.P. Morgan to prepare its own cryptocurrency, which has yet to launch. Sberbank had been actively preparing to launch its Sbercoin in February, prior to the invasion and ensuing sanctions, according to Reuters.
Unprecedented Western sanctions have struck at the heart of Russia’s financial system following its invasion of Ukraine in late February. As Russia’s largest bank, Sberbank shares dropped a staggering 74%, in what has become the biggest slump it has ever experienced.
While many companies have severed ties with Russia, it remains unclear how sanctions and the crisis have affected Sberbank’s partnership with J.P. Morgan or Sbercoin’s launch.
Crypto clash
Prior to the invasion, Russian authorities had come to an impasse as to how to officially approach cryptocurrencies.
While the finance ministry sought to regulate the crypto industry in Russia, submitting proposals, the central bank stuck to its gun, insisting that cryptocurrencies could threaten Russia’s financial stability, citizens’ wellbeing and its monetary policy sovereignty.
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