Russia’s Largest Bank Planning to Launch own DeFi Platform

• Sberbank net profit of 2022 dropped by 75% to 300 bln RUB.
• Sberbank has over one million corporate clients in more than 20 nations 
• The Russian bank has more than 110 million individual customers.    

According to the Interfax news agency, Russia’s biggest lender, Sberbank, is planning to launch its decentralized finance(DeFi) platform in the upcoming months. 

Sberbank is planning to launch decentralized finance to make the Russian decentralized financing system the best in the world and is testing its beta testing platform. 

Decentralized finance platforms became famous after the introduction of blockchain technology, which has benefits like faster transaction speed, Interoperability and no third-party involvement. 

Evangelist states that DeFi will lower the banking cost and ultimately replace the traditional financing banking system. At the same time, antagonists believe that the system has fewer real-world benefits and the same disadvantages as crypto sectors. 

Konstantin Klimenko, head of product at Sberbank, told Interfax news that “Sberbank will launch open testing of its platform in the third month of 2023 and will begin its commercial operations by the end of April.”  

Klimenko noted that the decentralized finance of Sberbank developed and launched the Ethereum blockchain, the second leading cryptocurrency in the crypto market in terms of market capitalization.

Bitcoin was the first cryptocurrency that came into existence and is the leader of the crypto market and was developed by pseudonymous computer developer Satoshi Nakamoto. 

In partnership with Russia, Iran’s central bank is considering the possibility of creating a digital token facilitating trade in the Persian region. The proposed gold-backed stablecoin can be used for payments in international settlements.

Russia and Iran, due to certain geopolitical situations, are under sanctions. This stablecoin could be considered a way for Russia to avoid sanctions, but they are using gold to avoid them. It is the fifth largest country in gold reserves, estimated to be around $630 billion. 

Both economically sanctioned nations are looking at these crypto assets to bypass restrictions. Iran placed the first official order for import using cryptocurrency in August 2022, while Russia is looking for ways to legalize cross-border crypto payments. CBDCs are also developing, with Russia and Iran being digital rubles and crypto rials.

The Russia and Ukraine war has created the worst situation in the international market and has badly affected Ukraine’s trade and financial conditions. 

While talking to a media outlet, the deputy digital manager of Russia noted that Russian citizens secretly send financial help to Ukrainians using blockchains and cryptocurrencies. 

Alex Bornyakov, deputy digital minister, said, “Donations to Ukraine have varied from one dollar to millions of dollars.” 

“Crypto, in certain cases, offers an anonymous way to transfer money. We saw that some Russians were donating to us a significant sum.” Alex added, “I understand that from within Russia there is no other way for them to do this other than through crypto.”  

Since the last few years, the crypto market has suffered severe volatility, and the prices of most cryptocurrencies have descended by more than 50%. However, the beginning of 2023 has reflected many positive movements in the market, with the leader coins, like Bitcoin, recently trading near $24K.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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