Money and Markets

Russia's biggest bank Sberbank gets permission to exchange crypto, as sanctions hobble dollar transfers

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People queue outside Sberbank to withdraw cash.
MICHAL CIZEK/AFP via Getty Images.
  • The Bank of Russia gave Sberbank a license to issue and exchange digital assets on Thursday.
  • The country's largest bank said sanctions have limited some forex transfers in Russia and internationally.
  • Some regulators have raised concerns that Russia could use crypto to undermine the impact of sanctions.
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Russia's central bank has granted Sberbank a license to issue and exchange crypto as sanctions hit its forex transfers.

The country's biggest bank said that Western sanctions targeting Russia had restricted the foreign currency transfers in Russia and abroad. Sberbank said the list of currencies available for transfer to Russian and other banks had been limited.

Sberbank said it would use blockchain technology which would guarantee the safety of digital transactions and allow companies to issue their own digital assets, purchase those issued within Sberbank, and make other transactions, Reuters reported.

The Bank of Russia granted the license to Sberbank just two months after it called for a ban on crypto usage, mining, and trading in the country. Regulators have raised concerns that Russia could use crypto to circumvent sanctions.

In October, the US Treasury warned that decentralised digital assets could dampen the impact of sanctions.

Some US Democratic senators wrote earlier this month to Treasury Secretary Janet Yellen and raised their concerns that cryptocurrencies could undermine sanctions. 

"These concerns have become even more urgent given the sanctions imposed on Russia after its invasion of Ukraine," Sen. Elizabeth Warren and three of her colleagues wrote following the invasion.

Earlier this month, US Federal Reserve Chair Jerome Powell spoke of the need to regulate crypto and was asked if Russia could use digital currencies to evade sanctions.

"I just think it underscores the need, really, for congressional action on digital finance, including cryptocurrencies," he told the House Financial Services Committee on March 2. "We have this burgeoning industry which has many parts to it, and there isn't in place the kind of regulatory framework that needs to be there."

However, a panel of experts from blockchain analytics firm Chainalysis told the US Senate on Thursday that there was no evidence of Russia using crypto to evade sanctions, Marketwatch said.

Sberbank had applied for a license with the Bank of Russia to launch its own digital currency in January, according to CoinDesk.

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