Gold-backed crypto coins have been issued in Russia 

The largest bank in Russia, Sber Bank, just announced that it has issued gold-backed digital assets on its own blockchain.

This is an interesting concept because there has been a lot of debate on whether crypto is considered a security or a commodity in the United States.

Now that there is the new existence of crypto coins that are backed by a store-of-value commodity like gold, this may change up the financial landscape in Russia.

The recent Russian law called “On Digital Financial Assets” was the law that enabled companies to start tokenizing different financial assets like gold.

What Sber Bank has done now is that they have essentially created a new digital format for gold that now exists on the blockchain that users can have self-custody of.

It is expected that this will attract a lot of new investors and institutions especially as there is a lot of concern about inflation for fiat currencies.

Bitcoin.com reports:

“We were attracted by the new digital format for gold, and we decided to try a new way to diversify the company’s balance sheet … We think that a new format of investment in precious metals can find its niche in the market,” commented Maxim Nazhmetdinov, the chief executive of Solfer.

“The deal demonstrates interest from the market and the real sector in a new instrument that can become a good alternative to investments within the de-dollarization of the economy,” First Deputy Chairman of Sber’s Board Alexander Vedyakhin stressed.

Pressed by sanctions over the war in Ukraine, Russia has been preparing to broaden its legal framework for DFAs to also cover decentralized cryptocurrencies.

While there is a general consensus among regulators in Moscow against the free circulation of bitcoin in the country, the government is considering legalizing crypto payments in international settlements.

It is quite interesting that this is coming from Russia given that the Russian government had previously had a hard stance against the crypto industry only a couple years ago.

However, it seems that current geo-political conflicts and concerns over the value of the Russian ruble has changed the country’s stance on crypto assets.

After all, many of the citizens in the country have started to use the blockchain as a method to preserve wealth and to transfer wealth without having any interference from a bank or government.

Sber Bank is intending to expand this new DFA product line in the future in order to attract even more institutional investors from around the world.

It many be only a matter of time before other international banks in other countries start exploring this option as well.

CoinTelegraph reports:

“We expect the number of corporate clients on our platform to grow rapidly and plan to expand the product line of digital financial assets.”

While current legislation on the DFA was put in force in 2020, in July 2022 Russian President Vladimir Putin has signed a bill into law prohibiting digital financial assets as payments method.

In June, a subsidiary of another Russia’s state-owned bank, VTB Factoring, reported its first major deal with digital finance assets.

As part of the deal, the bank subsidiary acquired a tokenized debt pool of the engineering company Metrowagonmash, issued via the fintech platform Lighthouse. Sber has tested its first deal involving DFAs later in July, issuing the three-month assets valued ₽‎1 billion (around US$14.5 million by press time).

With information from ProCoinNews