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Russia’s Largest Bank Sberbank Buys 5,000 Blockchain ATMs Despite Authorities' Plan to Ban Crypto

Sberbank, Russia’s largest bank, is purchasing more contactless ATMs that are powered by blockchain. The banking giant is making this move despite an upcoming bill that aims to penalize individuals and firms that use and trade cryptocurrencies.

The bank rides the blockchain wave

The banking institution just intends to cut the need for physical contact associated with the use of bank debit/credit cards amid the coronavirus pandemic. Throughout the COVID-19 epidemic, Sberbank has preferred to cut down the use of plastic cards due to health concerns.

The banking giant intends to buy 5,000 contactless ATMs within a framework of a tender that is worth over $100 million.

The news report further indicated that the blockchain-powered devices will support many contactless payment systems, including Samsung Pay, Huawei Pay, Apple Pay, and Google Pay. The ATMs will also be compatible with Mir Pay, which is the Central bank of Russia’s contactless payment platform.

Each ATM will have the capacity of storing 14,500 banknotes, powered by blockchain technology, which provides security features including intelligent monitoring, theft and vandal-proof system and pattern recognition software. Instead of customers interacting with touchscreens, they will be able to use the new contactless ATM machines via their smartphones.

Sberbank is a big fan of blockchain technology for business innovation. The bank’s official spokesperson mentioned that the use of advanced technology will attract new customers and assist in reducing costs.

Around two years ago, Sberbank launched a blockchain lab to examine promising applications for trials and use for various tasks. In November last year, Sberbank became the first bank in Russia to acquire a patent for a system that converts repurchase redemption (repo) transactions into smart contracts on blockchain.

Today, the banking institution has about 75,000 ATMs across Russia, and 55,000 of them are fully-featured ATMs throughout the country.

Per the news report, Sberbank also plans to add new functionality to the new ATMs including stock market trades, e-commerce orders, and contact-free loan applications. VTB Bank, Sberbank’s main competitor, also announced that it plans to launch a cash-withdrawal system, which uses smartphone technology for Google Pay and Apple Pay withdrawals.

Russia’s central bank will ban crypto issuance and trading in upcoming “digital financial asset” bill

Russian authorities said that they will not legalize cryptocurrencies like Bitcoin as a means of payment in the country and are still working in ways to regulate crypto transactions without fully banning them. In March 2020, the central bank of Russia disclosed that the upcoming bill on digital financial assets will ban the circulation and issuance of cryptos. Alexey Guznov, the head of the legal department at Bank of Russia, said that the central bank does not believe that cryptocurrency issuance and trading should be legal in the country.

The original bill on digital financial assets was passed in 2018, which stated that trading of cryptocurrencies was legal in Russia. However, Guznov disclosed that the amended bill would ban the selling and issuance of cryptocurrencies in the country. The amended bill would ban almost everything about crypto with the exception of holding cryptocurrencies.

The upcoming law seems controversial because it seeks to ban institutions from using, issuing, and trading cryptos, but people can hold cryptocurrencies. The consensus was reached with market players and various government bodies regarding the upcoming law. The consensus reached stated that nobody is going to ban owning (holding) of cryptocurrencies.

Alexey Guznov said that owning crypto is not like owning drugs or arms. He stated that legalizing cryptocurrencies is a big risk because Russian authorities and the central bank appear to associate crypto-related transactions with money laundering criminal activities.

The pending bill has been facing delay for more than two years now. Guznov revealed that the bill might finally be passed during this spring session. In 2018, Sberbank started trading cryptocurrencies outside the country so that to avoid violating domestic rules. Russian laws bar the bank from trading cryptos but the state-controlled bank looks for ways to serve customers in popular markets for some investors.

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Russian Banking Giant Sberbank to Tokenize Financial Assets Using Stablecoins

Sberbank, Russia’s biggest bank, has disclosed the possibility of issuing tokens to be utilized in digital financial assets (DFA) settlements. The token will be in the form of a stablecoin to be pegged to the nation’s currency, the Russian ruble.

Crypto bill enacted

Following the passing of the Digital Financial Assets bill by the nation’s central bank, the buying and selling of crypto were legalized. Nevertheless making payments using cryptocurrencies like Bitcoin was prohibited after Vladimir Putin, the Russian president, signed this bill on July 31.

According to Sergei Popov, the director of the transaction business division at Sberbank, this financial institution is considering the issuance of its stablecoin following the enactment of the DFA law.

He noted, “Probably, we can issue on the basis of the law that has been adopted, a token that we can peg to the ruble, such a corresponding stablecoin, which can become the basis, an instrument for settlements for some other digital financial assets.”

Russian lawmakers have also revealed restrictions on anonymous deposits made to online wallets as this will prevent unlawful activities, such as money laundering and drug transactions.

Sberbank’s appetite for crypto

According to the DFA law, digital rights include the right to demand equity securities transfer, monetary claims, and the liberty to be part of the capital of a non-public joint-stock company. It also gives crypto exchanges the green-light.

In May, Sberbank made airwaves after it spent a whopping $100 million to purchase 5,000 blockchain-based contactless ATMs with crypto-mining capabilities yet the DFA law had not been enacted as it was rumored that it could penalize firms and individuals who traded and used cryptocurrencies.

Each ATM was touted to have the capacity of holding 14,500 banknotes and blockchain technology would offer security features like intelligent monitoring, pattern recognition, and theft and vandal-proof structure.

Russian Banking Giant Sberbank and S7 Airlines to Streamline Air Ticket Purchase with Virtual Tokens

Sberbank, Russia’s biggest bank, has teamed up with S7 Airlines to revamp the sale of air tickets to corporate clients with virtual tokens, smart contracts, and a blockchain platform. This approach is expected to hasten settlements and eliminate the system of bank guarantees and advances, according to local news outlet Kommersant.

Blockchain-based settlements

S7 Airlines intends to use the recently unveiled Sberbank blockchain platform in the purchase of tickets, and this service will be rolled out in September.

As per the announcement:

“S7 ticket sales agents with accounts with Sberbank will be able to instantly make settlements through smart contracts using tokens. This is the first time such a solution has been used in Russia; the service will be available in September.”

According to Anatoly Popov, the deputy chairman of Sberbank’s board, the blockchain platform can be customized to suit any company’s needs when creating smart contracts and applications.

Sberbank has been making notable strides in the blockchain space on Russian soil. It recently disclosed its intention to tokenize financial assets using stablecoins.

Speeding up settlements

By leveraging the Sberbank blockchain platform, S7 Airlines aims at increasing the speed of air ticket settlement from the conventional ten days to a mere 20 seconds. As a result, customer satisfaction rates will be boosted as the hustle of bank guarantees, and advances is eliminated.

Furthermore, the algorithms recorded in the smart contract will prompt the tokenization and transfer of money from the agent’s account to the seller.

An S7 Airlines representative noted:

“Sberbank will act as the owner of the tokenization platform, as well as the guarantor of the availability of the required amount of money on the client’s current account. Tokens will be linked to real customer accounts.”

Russia is continuously crafting a name for itself in the blockchain arena as Expobank recently set a precedent by issuing the first crypto-backed loan in this nation.

Russian Sberbank Conducts First Digital Asset Trade on its Blockchain Platform

Sberbank, a Russian majority state-owned bank, announced on Saturday that it has conducted the first digital financial asset transaction on its own platform.

The lender said that through the use of its smart contract-based blockchain platform launched in March, it has carried out the first transaction, with its subsidiary, Sber Factoring, executing a 1 billion rouble (about $16 million) whose issuance is set to mature in the next three months.

Sber plans to issue and circulate cryptocurrencies and other digital assets on the platform, which has been built with blockchain technologies.

Sberbank disclosed that its blockchain platform is currently conducting a pilot project for a limited number of users. The bank intends to allow its all corporate clients to access trading of digital assets as well as other types of financial assets on the platform later this year.

Anatoly Popov, the Deputy Chairman of the board of Sberbank, commented about the development: “The launch of the platform and our obtaining the status of an operator is the result of the teamwork of many divisions of our bank in close cooperation with the Bank of Russia.”

Mr. Popov further disclosed that the research carried out by Sberbank’s blockchain laboratory since 2018, is now being applied into industrial business solutions. “We believe that our platform has good prospects since the digital format significantly speeds up and simplifies the process of issuing financial instruments and lowers the threshold for entering the market,” the executive stated.

Sberbank also plans to allow other firms to use its blockchain platform to issue their own digital assets, under applicable regulations in the Russian Federation.

Authorities Expanding Digital Assets Support

The announcement by Sber comes after the state-owned bank was given authorization by the Central Bank of Russia to issue digital financial assets.

Sberbank obtained approval from the bank of Russia to launch the blockchain platform in March. The bank was also added to the Central Bank’s registry information system and granted to issue digital assets.

In September last year, Sber applied to be included in the Central Bank’s register of information systems operators.

Amidst international sanctions that have targeted the core of Russia’s financial system, the nation has been opening up to more innovations of digital currencies.

Since February, the Bank of Russia has approved more than five companies to adopt blockchain technology, including Promsvyazbank (PSB), VTB Bank (VTB), Sberbank, Lighthouse, and Atomyze Russia.

Last month, VTB Factoring, a subsidiary of VTB Bank – Russia’s second-biggest bank – conducted its first cash-backed digital financial asset transaction through collaboration with the fintech firm Lighthouse.

Gold-Backed Digital Assets Were Issued By Russia's Biggest Bank

Sber, which was formerly known as Sberbank, is the largest bank in Russia. They just made an announcement that they will be launching the world’s first gold-backed digital financial assets (DFAs).The bank sees direct foreign investments (DFAs) as a great alternative to conventional investment vehicles in light of the current trend toward dedollarization.The first investor to acquire the issued assets was Solfer, which is a business that specializes in the sale and manufacturing of a wide range of metals.A gold-backed decentralized financial asset, also known as a gold-backed decentralized financial asset (gold-backed DFA), is a monetary right whose volume and price are decided by the price of gold.According to the legal documents that are associated with the problem, the bank has the intention of selling up to 150,000 DFAs to potential investors who are interested in making purchases.One has the option of purchasing DFAs until the 30th of July in 2023, if they so wish.These types of DFAs, according to Alexander Vedyakhin, the first deputy chairman of the Executive Board at Sber, are an alternative to traditional investments in the midst of the dedollarization that has been caused by the international financial sanctions that have been imposed on Russia as a result of its invasion of Ukraine. These sanctions were imposed as a direct result of Russia’s decision to invade Ukraine.Despite the fact that the preexisting rules on DFA were effective in 2020, President Vladimir Putin of Russia passed a measure into law in July 2022 that made it unlawful to utilize digital financial assets as a means of payment. This law was immediately put into action after it was passed.In June, VTB Factoring, which is a subsidiary of VTB Bank, which is another state-owned bank in Russia, stated that it had successfully completed its first substantial transaction utilizing digital financial assets.Sber completed its maiden sale using DFAs at the tail end of the month of July by issuing three-month assets with a total value of 1 billion roubles.

Russia largest bank is moving forward with the plan

Sberbank, the biggest bank in Russia, is pushing ahead with the plan to deploy its decentralised financing (DeFi) platform. The bank is now getting ready to test out the product within the next few months.

The head of Sberbank’s Blockchain Lab, Konstantin Klimenko, said on February 3 that the financial institution anticipates beginning open trials of its DeFi platform by May 2023. This information was published by the regional news outlet Interfax.

According to Klimenko, the new DeFi platform from Sberbank is now undergoing testing in a private beta phase. By the end of April, the platform will be completely open, allowing users to engage in the first commercial transactions.

The CEO said that the blockchain platform would be compatible with the Ethereum blockchain. This will enable users to transfer their assets using significant wallets, such as MetaMask, which was mentioned in the previous sentence. Klimenko also said that users would have the ability to move their assets from other platforms to this one.

The blockchain executive noted that Sberbank’s DeFi platform is working toward the goal of becoming a leading participant in the DeFi ecosystem in Russia. In addition to this, he was positive about the potential of decentralised finance systems to supplant the conventional financial services market.

This news is in keeping with Sberbank’s previously revealed intentions to permit DeFi apps on the bank’s infrastructure, therefore it makes sense that the bank would make this announcement now. Sberbank made the announcement in November 2022 that its proprietary blockchain technology will soon be compatible with smart contracts and apps running on the Ethereum network. This was one of the new features that was introduced.

It is not obvious how the future platform is going to be controlled, which may be due to the fact that Russia has not yet developed any regulations regarding digital money. Anatoly Aksakov, the chairman of the Duma’s Committee on Financial Market, claims that Russia would “certainly” implement cryptocurrency legislation in the year 2023.

According to earlier reports, Sberbank had a difficult time launching several blockchain products over the last few years since the Russian central bank repeatedly delayed their registration. Sberbank had anticipated launching its digital asset issuance platform in 2021, but it did not gain clearance from the Bank of Russia until the spring of 2022. The Russian government owns 50% plus one share of Sberbank, making it the institution’s largest stakeholder.

On February 2, Alfa Bank, which is one of the largest private banks in Russia, was granted permission to issue digital assets, joining Sberbank, the state-backed tokenization platform Atomyze, and the fintech company Lighthouse. Sberbank was the first financial institution in the country to be granted this permission.

Sberbank Executive Touts Blockchain for Russia

An official at Russia’s biggest bank, Sberbank, has proposed that the use of blockchain technology is the direction in which the nation should go in order to overcome the present settlement challenges it is facing. Alexander Vedyakhin, who serves as the first deputy chairman of Sberbank, is of the opinion that blockchain technology has developed considerably over the past few years and now provides new capabilities. These new capabilities may make it possible for Russia to develop payment systems that are more effective.

At the conference, Vedyakhin stressed the significance of blockchain technology in resolving Russia’s current settlement challenges. He said that the technology offers the possibility of a road to payment systems that are more effective. In addition to this, he pointed out that the technology has advanced substantially over the last few years, which has resulted in the creation of brand new avenues for its use.

The statements made by Vedyakhin come at a time when Russia is investigating a variety of options to upgrade its financial infrastructure and lessen its dependence on conventional banking systems. The blockchain technology, which is both decentralized and transparent in nature, may play a significant part in the accomplishment of these objectives.

The Russian government has previously indicated that it is interested in the creation of blockchain technology as well as its implementation. In the year 2020, Russia passed a legislation that regulated digital financial assets. This law established a regulatory framework for the usage of cryptocurrencies and other forms of digital assets across the nation. In addition, the Russian Central Bank has been doing extensive study into the feasibility of issuing a digital ruble, also known as a central bank digital currency (CBDC), which has the potential to enhance the effectiveness as well as the safety of the country’s various payment systems.

The fact that Russia’s biggest bank, Sberbank, has signaled its support for blockchain technology lends more credence to the idea that the technology might fundamentally alter the nature of the financial system in Russia. It is probable that blockchain technology will continue to see more acceptance as more financial institutions and governments throughout the globe understand the advantages of the technology. This will result in the creation of new possibilities for innovation as well as increased financial efficiency.