Bitcoin, Bitcoin Cash, Ethereum and Litecoin are Now Being Tested at Russia’s Two Largest Banks 🚨 This article is 7 years old...
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Bitcoin, Bitcoin Cash, Ethereum and Litecoin are Now Being Tested at Russia’s Two Largest Banks
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Updated: Nov. 7, 2019 at 2:28 am UTC
Photo by Tom Grimbert on Unsplash
Alfa-Bank and Sberbank — two of Russia’s largest players in the banking market — are currently in the testing phase of cryptocurrency-based investment options geared toward its retail investors, local Russian news Kommersant reported back on June 15th.
The two banks will be testing several products of private banking on the Bank of Russia regulatory “sandbox” platform. The Russian Central Bank’s piloting process usually takes no more than 45 days, yet the group expects this pilot to come to completion in about two weeks’ time. With that said, digital assets may be available to Russian retail investors banking with Sberbank and Alfa-bank shortly.
Anna Ivanchuk, Deputy Head of Sberbank Private Banking said:
“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.”
The assets offered on the platform will take the form of six cryptocurrencies — Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). Not all the digital assets offered were named, but the news report states that the digital assets chosen, account for “75% of the capitalization of all digital assets in the world.” Six of the most trusted digital currencies will be chosen and reviewed every quarter.
According to the algorithms used on the platform, the weights of the digital assets change dynamically. According to Alexei Prokofiev — Managing Partner at AddCapital and Chairman of the OCP — the algorithms that will be used show significantly higher yields than individual digital assets or the indexes composed of them.
Mr. Prokofiev told Kommersant:
“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.”
According to Prokofiev, the trades on the sandbox platform will only be carried out by audited cryptocurrency exchanges — such as Bitstamp and Kraken.
Russia Moving Forward
Russia’s stance on cryptocurrency may have wavered throughout the months, but it wasn’t until early this year that the country made its official stance. Due to the country’s uncertain standpoint, Russian banks were seen to hold back on the integration of blockchain technology, while many banks around the globe jumped on board.
In January of this year, Sberbank made the announcement that is would be opening its own cryptocurrency exchange options via its Swiss branch and just last month, the bank made an even bigger announcement.
As per Forklog, Sberbank and the National Settlement Depository (NRD) plan on piloting Russia’s first official Initial Coin Offering (ICO) via the regulatory sandbox.
Igor Bulantsev, an executive at Sberbank CIB, told reporters that his banks consider Russian ICOs to be “highly promising” and many of its clients are extremely interested in this new way of fundraising.
