- Sber, formerly Sberbank, issued a gold-backed digital financial asset to Solfer.
- Sber, Russia’s banking and digital payments giant, is active in crypto.
- Russia is actively seeking ways to use crypto to evade US sanctions.
As Russia is under pressure from crippling US sanctions, banking giant Sber is exploring blockchain technology to reduce the country’s reliance on foreign currency.
Its efforts recently came to fruition as Sber closed its first deal with its gold-backed digital financial assets (DFAs). According to the company’s press release, Sber issued digital financial assets to Solfer, a manufacturer and seller of precious metals.
The digital financial asset could be an alternative to trading in US currency, Alexander Vedyakhin, first deputy chairman of the Sberbank’s Executive Board, said.
“The deal demonstrates that the market and the real economy are interested in the new instrument, which may be a great alternative to investments amid de-dollarization,” Vedyakhin said.
Russia is actively looking for ways to end its reliance on the US Dollar. Sber believes that this could be an excellent boon for DFAs.
“We expect the number of corporate clients on our platform to grow rapidly and plan to expand the product line of digital financial assets,” he added.
Sber unveiled its first DFA product in July, issuing $16 million in DFAs with a three-month maturity. Sber said its platform uses blockchain technology and smart contracts to issue these digital assets.
Russia Pivots to Crypto Amid Crippling Sanctions
Russia has been actively looking into crypto assets since it invaded Ukraine, which has brought on crippling sanctions from the US. The country hopes to use cryptocurrencies and blockchain technology to bypass these sanctions.
In November, Russian President Vladimir Putin called for an international payment system powered by blockchain technology.
“It is possible to create a new system of international payments based on digital currency technologies and distributed registries, much more convenient, but at the same time completely safe for participants and independent of banks and third-party interference,” Putin said.
In May, the Congressional Research Service released a report on potential methods Russia can use to evade sanctions with crypto. These include crypto mixers like Tornadocash and P2P exchanges.
On the Flipside
- Russia is currently isolated from many countries that were formerly its largest trade partners. It is unclear whether Russia’s push away from the dollar will have any tangible effect on the global economy.
Why You Should Care
Russia’s push for digital financial assets could be a sign of things to come. Governments around the world may begin looking for ways to diversify their currencies in order to reduce reliance on foreign currency.