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Sberbank Prepares for Crypto Regulation in Russia Starting in January 2021

09 December 2020 11:00, UTC
Denis Goncharenko

As the Russian government prepares to launch its crypto regulation legislation starting January 2021, the largest bank in the country is ready to unveil its crypto project and according to several local experts, absolutely dominate the Russian crypto market.

However, not all the cards are being shown by Sberbank at the moment as it waits in anticipation of the first law to come into power. This will happen on January 1st, 2021, as the Duma will embrace their “On Digital financial assets” legislation. Sberbank has already created a blockchain platform that will facilitate the sale and purchase of digital financial assets but will not be able to distribute things like cryptocurrencies and stablecoins from the get-go.

Regulation on that specific aspect of the market is still being considered by the Duma, and will most likely not be seriously paid attention to until proper data is gathered on the success of the first legislation. What this means is that regulation for “On digital currencies” may be delayed by at least a year as sufficient data will need to be gathered for the government to seriously consider further enhancing what they’re already allowing.

Plans within plans

Sberbank is also considering launching a very ambitious project called Sbercoin, which could be brought to life by partnering up with JPMorgan and its JPM coin. However, the CEO of Sberbank, Herman Gref explained that the company will only start focusing on their own coin once the Duma is comfortable with starting development on the Central Bank Digital Currency, also known as the Digital Ruble.

What changes will this bring to the Russian digital economy?

Well for one, it’s guaranteed that due to having its foot through the door first, Sberbank will have a huge advantage once the digital ruble is in place for the Russian digital economy. They may even have exclusive access to the asset compared to other, smaller, and privately-owned enterprises.

This is advantageous for the Russian government as well, as they will be able to keep the supply very centralized without having to diversify too quickly. Furthermore, they will have quite sophisticated information on where the digital currency is being used the most. Most people believe that the currency will first find its way towards the growing eCommerce market in the country, and then transition to a bit more taboo industries like iGaming for example.

This anticipation is solidified by the fact that cryptocurrencies are already being used heavily in the Russian iGaming sector without the government having a clear picture to see where these funds go, who gets them, and how much. Therefore, it creates a pretty dangerous scenario where, if a consumer is unfairly treated, there will be almost nothing they can do to prove this misconduct without getting themselves in trouble as well. This is because Russian law does not specify whether BTC gambling is allowed.

Providing a “government-mandated cryptocurrency” it’s likely that these illegal hubs will be discouraged from operating in the future, or further motivated to continue on a much larger scale. The Russian government is truly walking a thin line here.