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Sbercoin, Russia’s largest bank trills out its cryptocurrency

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Following the invasion of Ukraine, Russia’s largest bank, Sberbank, launched its own native cryptocurrency, the Sbercoin.

Russia has been battered by a barrage of sanctions since its invasion of Ukraine. It was eventually cut off from the majority of its foreign currency reserves as well as the global financial system. In the midst of it all, Russia’s largest bank, according to local media, announced the launch of a cryptocurrency.

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Sberbank Europe AG, headquartered in Austria 

On March 17, the Russian Federation’s Central Bank granted Sberbank a license to issue and exchange digital financial assets. Sberbank was placed on the central bank’s register, along with financial ecosystem Lighthouse, permitting both companies to issue and trade digital assets on their platforms.

However, Sbercoin was reportedly introduced on the same day by Russia’s largest bank, according to media sources. Sbercoin’s introduction, according to some industry observers, could be a mechanism to trade rubles for other currencies without avoiding Western sanctions.

Sberbank announced that it would use blockchain technology to maintain the security of digital transactions, allowing firms to develop their own digital assets, buy Sberbank’s, and conduct other transactions. Sberbank CEO German Gref stated in late 2020 that the bank was working with JP Morgan on the development of its own cryptocurrency, Sbercoin, which has yet to go live.

Sbercoin, a savior in disguise

Since the conflict, Russia has struggled to pay its dollar-denominated obligations. Some believe sbercoin will be utilised to circumvent the restrictions. However, Asheesh Birla, the general manager of RippleNet, believes that this idea is debatable. In an interview with Markets Insider, the CEO of the blockchain-based payments service provider remarked,

“It’s going to be super-problematic for them to get much traction here because they also need a liquid exchange that is going to take the Russian ruble.”

On March 17, Sbercoin started trading at $0.0003617, with a 24-hour trading volume of $948,000. According to data from CoinMarketCap, the coin, which is traded on Pancakeswap, has dropped 30.94 percent to $0.00006707 in the last 24 hours.

Russia’s Biggest Bank Rolls Out Its Native Cryptocurrency

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Russia’s biggest lender Sberbank has launched its own cryptocurrency-Sbercoin [SBER] in an effort to steer its struggling economy that has been badly beaten down by a host of sanctions since its war with Ukraine. The move reflects the nation’s struggle to meet dollar-denominated debt obligations,

In early March, trading in Sberbank came to a halt in London after its shares plummeted 95%, leading to its closure. But a few weeks later, on March 17, the Russian central bank allowed Sberbank a license to issue its own cryptocurrency, according to media reports. That led to the launch of sbercoin the same day.

A person walks by Sberbank HQ in downtown Moscow

The news of the launch was met with skepticism as one expert questioned the feasibility of the project. Asheesh Birla, general manager at blockchain-based payments service provider RippleNet said,

“It’s going to be super-problematic for them to get much traction here because they also need a liquid exchange that is going to take the Russian ruble.” Birla pointed out that while Sberbank can launch a cryptocurrency, it might not help move cash in and out of the country.

The idea for a Sberbank-issued cryptocurrency was first put forward in 2020 when the banking firm began experimenting with blockchain technology. Its CEO Herman Gref said at the time the bank could look at issuing sbercoin in 2021, a local news site reported.

Russia on a Panic Mode

The US and its allies worked together to ban Russia from using SWIFT, a global communications service that oversees international financial transactions, effectively shutting it out of international trade.

Following that the nation now demands payment in its currency the ruble for natural gas exports. Another Russian lawmaker has suggested buyers from countries friendly to Russia could pay in their own fiat currencies — or in bitcoin.

The sanctioned hit country has also begun looking out for safe havens elsewhere. In an earlier report by TronWeekly, several crypto exchanges have received a ton of requests from individuals based in Russia seeking protection for their fortunes. Some clients are reportedly resorting to investing in real estate in the UAE through crypto while others want to convert it into fiat and stash it elsewhere.