The Central Bank of Russia granted Sberbank a license to issue and exchange digital assets. But crypto will not save Russian from Western sanctions.
Russians just can’t decide what to do with crypto.
Two months ago the Central Bank urged for a complete ban on cryptocurrency trading, mining, and use. So Russia effectively banned crypto.
But now things look different.
Disastrous Western sanctions are eliminating Russian economics. It is obvious that Russian ruble is quickly becoming obsolete and worthless.
The new statement from the government may present the Sberbank with additional options as it strives to mitigate the impact of Western sanctions.
Russia aims for its own Bitcoin
A government-run Sberbank is the Russia’s biggest retail bank. It has recently disclosed its pullout from European markets, citing the impact of sanctions on Russian-exposed sectors.
Now Sberbank was added to the CBR’s register with the power to issue digital financial assets and exchange them.
It means that other Russian financial companies can use Sberbank’s platform to create their own digital assets in order to attract market capital. They can also purchase digital assets through the lender’s system, or conduct other digital asset transactions.
Sergey Popov, director of Sberbank’s transaction business section, pointed out that companies will be able to make their first transaction on its blockchain platform in a month.
Crypto to save Russia from financial disaster?
The question is, will crypto save Russia from sanctions.
The US and the European Union have sanctioned Sberbank.
According to the US Treasury, Sberbank controls the highest market share of savings accounts in Russia. This bank is actually country’s primary creditor.
Lately Sberbank’s stock have plummeted. On the London Stock Exchange, its foreign depository shares have fallen nearly 100%.
In January 2022 Sberbank announced it wish to issue the crypto coin. They even made up a name for it – Sbercoin.
According to Sberbank’s officials, they intended to partner with American multinational investment bank JP Morgan to build Sbercoin.
Of course, now these plans are effectively ruined. No American bank is able to collaborate with Russian state owned bank.
What can Russia do with crypto?
It is obvious that cryptocurrencies are much less transparent than fiat money.
It it theoretically possible to avoid transactions limitations for assets transfer if you operate with crypto. The existing world financial system is led by the US. Which is obviously not convenient for Russians nowadays.
But crypto will not save Russia from sanctions, analyst say.
The thing is that Russia has been adopting crypto in a really slow pace lately. The country is simply not ready for a wide usage of cryptocurrencies and digital assets, experts say.
Switching financial systems to crypto will require significant efforts and wide adoption of new blockchain technologies. And that might be quite difficult in the circumstances where Russian are deprived of the rights to use even Microsoft or Amazon products.
With no access to Western technologies, Russia will have to build the blockchain infrastructure from scratch. And that might take a while, if possible at all, experts say.
So the short answer is – no, crypto will not save Russia from sanctions.