Russia and Crypto Fast-tracked – Bank Issues Crypto License to Sberbank

Russia and Crypto

Welcome back to the Tribe! In this post we dive into Russia and Crypto!

Nothing should be considered investment or financial advice. Enjoy the ride!

Russia And Crypto

Russia’s central bank has issued a crypto license to local financial institution Sberbank. The move comes on the heels of recent agitation from Russia’s Finance Ministry, calling for the legalization of digital assets in the country.

Also, the news could signal a change in the view of central bank officials. The governor of Russia’s apex bank previously called for an outright ban of cryptocurrencies.

Sberbank Approved to Issue Digital Assets and Crypto Exchange Services

Reuters reported that the Central Bank of Russia has approved a virtual asset license for Sberbank, one of the biggest banks in the country. According to the news which broke on Thursday (March 17, 2022), the license issued to Sberbank allows the money house to issue digital assets.

In addition, the approval also includes regulatory permission to offer virtual currency exchange facilities and services to investors. The latest move from Russia’s top bank is in direct contract with previous rhetoric in support of a nationwide crypto ban.

Key officials from the Central Bank of Russia previously said that cryptocurrencies pose a significant risk to investors and traders. Bank of Russia Governor Elvira Nabiullina also opined that digital assets could destabilize the country’s financial system and incentive broad-based illicit activities such as money laundering and cyber security attacks.

Despite stiff opposition from central bank officials, Russia’s finance minister Anton Siluanov maintained that crypto has the potential to improve the country’s economy and open the doors for great foreign investment. Siluanov also warned that Russia might be left behind in terms of innovation should a ban be implemented.

President Vladimir Putin also asked relevant government agencies to develop an acceptable regulatory framework designed to oversee the booming virtual asset economy and ensure compliance with industry-standard policies.

Crypto Legalization

Russia’s Finance Ministry has since submitted a bill on crypto legalization for consideration back in February 2022. The bill proposes that cryptos like Bitcoin should be accepted as investment options and companies dealing in cryptocurrencies must obtain a business license from market supervisors before starting operations in the country.

Also, the proposal also suggested that a literacy test should be implemented for investors before exchanges are allowed to onboard customers. A restriction on deployed capital based on assets held and annual income will also be placed on crypto investors, per the bill.

The decision from Russia’s top financial institutions supposedly comes as a strategic move to cushion the effects of economic sanctions levied by governments in the West like the United States.

Previously, the European Union Committee announced a ban against Russian banks that effectively removed the country from a key payments portal called Society for Worldwide Interbank Financial Telecommunication (SWIFT).

Ukrainian authorities also called on exchanges like Binance, Coinbase, and Kraken to freeze assets in Russia addresses and ban its users from accessing trading facilities in a bid to staunch access to financial resources and possibly starve Putin’s military capabilities.

Other News – Central Bank Digital Currency

As more countries move to regulate and integrate cryptocurrency into their financial system. Canada and India are the recent countries exploring the option of a Central Bank Digital Currency. The decision by both countries to explore this option comes despite the absence of clear regulation for cryptocurrency.