Entry of traditional banking giants has helped the crypto market to reach a new milestone, in a similar matter, Sberbank a known bank in Russia has announced that it has plans to conduct its first pilot cryptocurrency transaction under the framework of foreign economic activities by the end of 2024.
The information was first reported by Tass citing Anatoly Popov, a senior executive in the management board of the bank, additionally quoting ” We understand the importance of settlements using stablecoins or cryptocurrencies in foreign economic activity. And we are currently working out the nuances of this regulation with the Bank of Russia, and we expect to make the first transactions before the new year.”
This announcement isn’t the first time the bank has announced any linked activity related to cryptocurrencies, it is reportedly working with Moscow for a digital ruple pilot. The Sberbank official appeared to suggest that the pilot would operate as part of the Central Bank’s cross-border crypto settlements sandbox.
The bank wants to use the sandbox to help Russian firms buy and sell goods and services outside the conventional financial system.
Russia Eyeing to Boost Dominance Over the Crypto Market!
In the past few months, Russia has shown keen interest in cryptocurrencies, recently it has signed a bill for cryptocurrency mining.
The newly passed cryptocurrency mining bill establishes a structured framework for mining activities in Russia. It includes the creation of a register enabling Russian legal entities and entrepreneurs to participate in large-scale mining operations.
While the framework targets significant mining volumes, smaller operations under a specified energy consumption threshold will remain unregulated.
Although Russia ranks among the countries with the highest number of cryptocurrency users, the trading of Bitcoin and other digital assets is not prohibited. However, cryptocurrencies are not yet recognized as legal tender in the country.
Finance experts suggest that Russia, a leading manufacturer of weapons and war machinery, may begin accepting cryptocurrencies for payments if these assets maintain their credibility and favorability.
Recently, Russia enacted legislation legalizing cryptocurrency mining and permitting the use of cryptocurrencies for international payments. This move could enhance Russia’s ability to bypass the U.S.-dominated financial system, enabling non-dollar-denominated trade.
However, large-scale evasion of on-chain sanctions remains unlikely. Russia’s total foreign exchange reserves amount to just under half a trillion dollars, with approximately $300 billion in dollars, euros, and British pounds still frozen.
Before the Russian invasion, Bitcoin transactions declined as users safeguarded their assets. Once the conflict intensified, Bitcoin usage surged, with funds rapidly transferred as a protective measure.
Amid the growing crypto mining industry, a senior Kremlin official has warned of potential energy shortages in the next 5-10 years.
Maxim Oreshkin, deputy head of the presidential administration, noted that regions like southern Siberia are already facing capacity challenges due to the increased demand for energy from crypto mining activities, as reported by TASS.
