Sberbank and Alfa-Bank, the two largest banks in Russia, announced their intention to provide crypto-based financial instruments. They intent to provide such services while complying with the country’s legal parameters.
The decision was announced on Wednesday, in the framework of discussions at the roundtable: “Digital financial assets for banks, funds and large capital: the position of the regulator and solutions for investors.”
This move provides a breathing space for cryptocurrency enthusiasts in the country after the government’s clear intentions to maintain a very adverse policy regarding the use of cryptos as a mechanism to replace or complement the Ruble.
Both banks have a very influential position in Russia. AlfaBank has total assets valued at 44.7 Bn USD while Sberbank has a total of 390 Bn USD in assets. The decisions of these giants could influence the future actions of other financial institutions.
Until now the services will operate as investment portfolios. They will work with six cryptocurrencies. BTC, ETH, LTC, and Bch will be on the list
According to information provided by Kommersant, the criteria for choosing the cryptocurrencies to be used was based primarily on trust; however, they also considered the fact that the six chosen cryptos account for approximately 75% of all digital assets in the world.
The following groups are responsible to provide the final products to Russian consumers:
- Alfa Bank
- AddCapital Fund
- National Settlement Depository
The chairman of the OCP, managing partner of AddCapital Alexei Prokofiev mentioned how the service would work in general terms:
The client actually receives a fund unit. The assets of the fund are stored using custody solutions and audited by the Group IB cyber security. The unit is liquid, it is possible to request a withdrawal to the currency of the client at any time
A New Oportunity fo Cryptos in Russia
Anna Ivanchuk, deputy head of Sberbank Private Banking, was quite enthusiastic about this step forward regarding financial innovations. She commented that these services would allow for further expansion of the crypto user ecosystems in a country with such a delicate regulatory framework in this regard:
We want to offer our clients a completely transparent version of the entrance to digital assets that fully meets the regulatory requirements that will allow them to invest in an interesting product in Russia idea is
Alfa-Bank’s Anton Rakhmanov, mentioned the Banks’ intentions to provide a legal, solid and government-accepted product:
Our goal is to accelerate the adoption of a decision on the recognition of the CFA investment assets and introduce them into the legal field as quickly as possible
According to Central Bank, the piloting process takes no more than 45 days. The testing period will last from one to two weeks depending on the complexity. The Central Bank emphasized the seriousness with which they are taking the matter:
The decision on the appropriateness of introducing tested products will be taken by the Bank of Russia jointly with government agencies only if risk management mechanisms are developed to ensure their minimization