Russia’s apex bank has approved Sberbank (the nation’s top lender) to start providing digital assets services. The move became necessary after EU and US sanctions had strongly devalued Russia’s fiat currency earlier this month.
The Operational License Becomes Effective Immediately
Sberbank released an official statement confirming the notice saying, “we are among the financial service providers that the central bank has approved to start providing virtual asset services.” The new policy becomes effective immediately as it allows Russians (especially their oligarchs) to settle their financial transactions quickly following economic sanctions from the EU and US against Russia.
It is also important to note that state-owned Sberbank is under sanction from the US and EU. Russia was sanctioned by the EU and the US following its invasion of Ukraine, which started late last month. Sberbank’s digital platform will record each issued and distributed digital asset. Its distributed ledger technology will prevent data alteration and ensure data security.
Sberbank’s Digital Asset Policies For Companies
The lender will also enable companies who meet its cash prerequisites to issue their virtual assets. Sberbank further disclosed that it could help firms earn income from their unused funds. They can invest these funds into Sberbank-issued digital assets.
One of the top lender’s top-level executives, Sergey Popov, explained that firms could start performing transactions on Sberbank’s blockchain network once their account is 30 days old. He further said, “we are new to the virtual asset service provider space, and we understand that there is a need to adapt to the present regulatory infrastructure before we can start thinking of advancement. Hence, we are relating closely with the relevant agencies to facilitate our development once we are ready.”
How Russia Is Dealing With Economic Sanctions
Russian companies (including Sberbank) listed on the London stock exchange suffered huge losses almost immediately after the sanctions on Russia became official earlier this month. Sberbank lost over 90% of its value, while the value of Rosneft, Lukoil, and Novatek has also declined significantly. As the leading credit issuer across Russia, Sberbank’s share of the savings deposit market in Russia is the biggest.
Also, the lender has physical locations in the capital of top EU countries. Thus, it is the largest bank across eastern Europe. The US Senate continues to debate crypto-related ways that Russia-related firms can use to escape sanctions imposed on them. The focal point of the Senate discussion on march 17 was on this issue.
While the Senate was discussing the matter, a section of the senators proposed a bill to ensure that Russia doesn’t circumvent the sanctions through crypto. The bill aims to cut off Russia from the world’s financial system.
Earlier today, Russia’s apex bank authorized its financial institutions to increase its oversight functions over its customers’ accounts to ensure that no resident or citizen violates its policy on international financial transactions.
The policy was enacted a few days after Russia’s invasion of Ukraine. While the economic sanctions were primarily aimed at Russian oligarchs, ordinary citizens are suffering from the effects of the sanctions as inflation keeps rising.
