Sberbank Launches Cryptocurrency as Russia Leaves Global Market

Russia’s largest commercial bank has pulled out of the global financial markets — and is now launching a cryptocurrency of its own.

Since the start of Russia’s war against Ukraine, a host of sanctions have been imposed on the country, cutting it off from most of its foreign currency reserves and the global financial system.

However, amidst all of this, Russia’s biggest bank is launching its own cryptocurrency.

Earlier in March, just days after the invasion of Ukraine commenced, trading in Sberbank shares was halted in London after they plummeted 95%. The lending firm was ordered to close its European business as Western sanctions threw Russia’s economy into utter disarray.

However, according to media reports two weeks later on March 17, the Russian central bank granted Sberbank a license to issue its own cryptocurrency, which eventually led to the launch of bitcoin the same day.

The country (Russia) is militating to meet dollar-denominated debt obligations, and it has said it will demand payment for its energy in rubles.

RELATED: First blockchain ETF launched by Sberbank of Russia

However, the possibility of this is arguable – according to Asheesh Birla, general manager at blockchain-based payments service provider RippleNet.

“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,” Asheesh said.

Birla further cited that while Sberbank can launch a cryptocurrency, it might not help carry cash in and out of the country.

“I’m not sure it’s going to be very helpful in terms of getting liquidity in and out of Russia,” Birla said about sbercoin.

“It’s like taking your own bank account and putting it onto a ledger. It’s not all that useful unless you can start trading it for other things. And so far, the data I saw is that it’s not very liquid,” he added.

The US and its allies currently show a few concerns about the use of cryptocurrency to bypass financial sanctions on Russia, even though there have only been a few notable signs as of date.

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Godwin is a multi-faceted writer. He covers the latest and most significant news in the crypto industry for Newsbsc. Aside from his work here, he writes exceptional SEO optimized web contents for other websites in different sectors.

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