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Babafemi Adebajo
An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
Russian retail bank Sberbank has announced it will begin issuing digital financial assets (DFAs) on its platform. The announcement became public on Thursday after the bank obtained approval from Russia’s central bank.
Recall that Sberbank previously announced its intention to launch a stablecoin, Sbercoin, following a partnership with JPMorgan. In January, the company also applied for approval to the central bank for a blockchain-based platform. On its part, the Central Bank has been vocal in its call for a total ban on mining and trading.
After Russia’s unprecedented invasion of Ukraine, Russia’s financial system took a hit from Western sanctions. Sber was one of the companies affected. It was however unclear what the impact of the sanction will be on its proposed coin or partnership with JPMorgan. The approval by the Central Bank may very well be how the retail bank deals with the situation.
The approval comes one month after Atomyze Russia obtained approval to begin exchanging digital assets in the country. Lighthouse was also approved with Sber to issue and exchange digital assets on its platforms. Also recently, the Russian Ministry of Economic Development suggested crypto mining operations be authorized in regions that produce excess electricity sustainably.
Sberbank Announces Benefits to the Market
While making the announcement, the bank noted the possible benefits such a license would bring to the market. Sberbank stated that the possibility to issue DFAs will allow companies to prove their cash requirements and attract market investments.
Likewise, it noted that companies will be able to invest all idle funds and generate income from them by acquiring Sber’s DFAs.
According to the announcement, the assets issued on Sber’s platform will be recorded and circulated via a blockchain-based information system. This will guarantee data security and ensure the immutability of data
Regarding this, Sergey Popov, director of the Transaction Business Division, Sberbank commented. He noted it will take one month to finish setting up the blockchain platform so companies can take advantage of it.
He said that the company had realized further development on its digital assets work would require “adaptation of the current regulatory framework”. “To do that, we are ready to work closely with the regulator and executive bodies,” he concluded.
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