Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Expobank has become the first bank in Russia to issue a loan with crypto as collateral. The loan was powered by WAVES tokens.
For the first time in Russia, a bank issued a loan with crypto tokens as collateral. According to a report by the Russian media platform Kommersant, Expobank is the first to give out a loan secured and powered by Waves (WAVES).
Expobank told Kommersant that it issued the loan to businessman Mikhail Uspensky. Uspensky revealed that he will keep using WAVES and has no plans of selling his tokens. Earlier today, Alexander Ivanov, the Waves founder and CEO, also confirmed the news in a tweet. Neither Waves nor Expobank disclosed the value of the loan.
— Sasha Ivanov (@sasha35625) August 19, 2020
Russia Issues Loan Backed by Crypto
According to the report, the loan was issued “through the conclusion of an individual bank loan agreement secured by Waves tokens.” The head of Expobank’s legal department, Tanzila Yandieva, believed the transaction would pave the way for more crypto-backed loans. He described the deal as “precedent in nature for both the legal and banking community.”
In addition, Expobank used an escrow mechanism in the process of structuring the loan. Presently in Russia, the escrow mechanism remains the best means for a lender to quickly fulfill obligations to a creditor, by transferring property in the form of deposited digital assets.
Expobank however hopes that the use of crypto tokens as loan collateral will be allowed under the new rule. Emphasizing the Russian law, Vegas Lex lawyer, Kirill Nikitin, said Russia’s spread of crypto assets may have ties to legal uncertainties.
Also, some other legal practitioners believe that WAVES can be used legally in Russia. Yuri Borisov, the lawyer in charge of the bank loans, said that it is legal to use Waves tokens in Russia:
“There are no restrictions on the circulation of non-payment tokens in our country.”
Crypto Increasing Recognition
Many are now investing in cryptocurrency, which shows that there is a future for digital currencies. The CEO of cryptocurrency neobank Chatex, Michael Ross-Johnson, attested to the increasing global recognition of crypto. Ross-Johnson believes that several state governments’ decision to regulate the crypto market shows “the increased influence of digital currencies.”
In contrast, the executive director of Klopenko Group, Dmitry Ivanov, noted that it is too soon to believe crypto is now part of human life. Also, he added that it is rather early to conclude that financial organizations and investors want digital assets.
Crypto Regulation In Russia
In the past years, there have been a lot of rising crypto-related issues in Russia. Due to this, President Vladimir Putin set a deadline last year for the government to come up with a standard regulatory framework for cryptos. The report came from the president’s official website stating the 1st of July, 2019 as the deadline.
Back in July, Russia passed its first law on digital currencies. The law prohibits the use of cryptocurrency in paying for goods and services in the country. In addition, the new rule which will be official in January 2021 bans the advertisement of digital money payment methods.