Russia's Largest Bank Drops Cryptocurrency Plans Over Regulators’ Negative Stance

Francisco Memoria

Russia’s largest bank, the state-owned Sberbank, has recently dropped its cryptocurrency-related plans over the country’s negative stance towards cryptocurrencies and blockchain technology, according to vice president Andrey Shemetov.

As first reported by local news outlet TASS, Shemetov revealed through a press release that Sberbank was waiting for clearer cryptocurrency regulations in Russia to launch a cryptocurrency-related service.

The plan was dropped, however, as the country’s central bank, the Bank of Russia, and the local financial regulator aren’t looking positively at the crypto space. Shemetov was quoted as saying:

Regarding cryptocurrencies, we waited for legislation that allows you to trade cryptocurrencies. Since the regulator is currently looking negatively [at cryptocurrencies], we decided to suspend our cryptocurrency plans.

The bank’s vice-president didn’t specify which cryptocurrency-related plans the bank suspended, although TASS notes in January of last year its subsidiary in Switzerland, Sberbank Switzerland AG, announced plans to launch a cryptocurrency exchange.

As covered, Sberbank’s chief executive officer, Herman Oskarovich Gref, has stated he believes blockchain technology may provide “tremendous opportunities,” and make business processes significantly more efficient. At the time, Gref claimed it would take 10 years for the technology to achieve mass adoption.

The state-owned bank has late last year successfully completed a foreign exchange repurchase agreement with the use of blockchain technology, along with a Moscow-based private equity firm named Interros Company.

It’s worth noting TASS reported earlier this month that Russia postponed the adoption of cryptocurrency regulations due to requirements from the Financial Action Task Force (FATF) regarding terms like cryptocurrency and bitcoin. This, as lawmakers avoided specific terminology over a “specific position” taken by Russia’s central bank.

The country’s president, Vladimir Putin, has criticized cryptocurrencies, claiming they proved opportunities for criminals to launder funds, finance terrorism, and evade taxes. At the time, Putin added that investors may be at risk as there’s no entity behind cryptocurrencies, but noted it’s important not to create barriers when trying to improve the financial system.