Russia’s largest bank gets license to issue digital assets

Russia’s top lender Sberbank has received regulatory approval from the country’s central bank to start issuing digital finance assets (DFAs).

The license, which adds Sberbank to the list of financial institutions allowed to issue digital assets, was granted on 17 March 2022. 

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A statement on the Sberbank website notes that companies seeking to tap into this opportunity can do so via the bank’s digital assets platform. The distributed ledger technology (DLT) based system will allow institutions to issue digital assets, acquire DFAs, or invest currently idle funds for further income opportunities.

Companies can also use the platform to issue assets that attract market investments or to handle other digital asset transactions.

But all these will have to happen as per Russian laws, Sberbank added in the statement.

“Companies will be able to make their first transaction on our blockchain platform one month from now,” said Sergey Popov, Sberbank’s head of the Transaction Business Division, 

He added that the bank was “just starting,” referring to what lies ahead in terms of what needs to be done.

The official confirmed the bank will need to adapt its operations to align with the new regulatory environment.

Sanctions

The license to issue digital assets comes amid tough sanctions on Russian banks, including the exclusion from international payments system SWIFT.

On Friday, 18 March, Sberbank said its restrictions barring FX transactions across correspondent accounts in the United States had come into effect. The sanctions have removed interbank cross-account transactions, with no foreign currency transactions (both domestic and cross-border).

Essentially, Sberbank customers have no way to transact in US dollars, UK’s pound sterling, the Swedish krona, the Danish krone and Canadian dollars.

Russia’s outlook on crypto and digital assets has changed since Vladimir Putin’s invasion of Ukraine, with the Bank of Russia looking towards a digital ruble.