Two of Russia’s largest banks are to begin piloting cryptocurrency trading for their private clients, according to a report by Kommersant on Friday (June 15).
The tests will be conducted within the “regulatory sandbox” of the country’s central bank, and follow recent comments by Russian president Vladimir Putin, that cryptocurrencies “cannot be a means of payment or saving” but subject to tight and careful regulation “have their place within the world”.
The pilot process will allegedly take 45 days, after which a joint decision will be made by the Bank of Russia and government agencies on whether to introduce the products.
Those taking part are Sberbank, a state-owned bank responsible for processing government employee pay, and the country’s largest private banking group Alfa-Bank, who will be offering clients shares in a fund that will be trading the six “most-trusted” cryptocurrencies on audited crypto-exchanges.
“We want to offer our clients a completely transparent version of the entrance to digital assets that fully meets the regulatory requirements that will allow them to invest in an interesting product in Russia,” said Anna Ivanchuk, deputy head of Sberbank Private Banking.
Alfa-Bank’s managing director of private wealth management, Anton Rakhmanov, said that with cryptocurrencies or “digital financial assets” (CFA) set to become a large part of the global economy, “our goal is to accelerate the adoption of a decision on the recognition of the CFA investment assets and introduce them into the legal field as quickly as possible”.
Handling the technical solution for the project will be investment fund AddCapital, whose CEO Alexey Prokofyev, said that investors will purchase a “liquid” share of the fund, that they will be able to withdraw to fiat at any time.
Including Bitcoin, Bitcoin Cash, Ethereum and Litecoin, the combination of coins would be reviewed every quarter, while their proportions within the fund would be managed by a trading algorithm. According to Kommersant, the current net assets of those digital funds managed by AddCapital is over $60 million (£45 million), while the threshold of entry for qualified investors is around $500k (£378k).
Despite the positive signalling of cryptocurrency uptake in Russia and its leading banks, Sberbank’s president, Herman Gref, has made no pretence around his personal views on crypto, telling Kommersant earlier this month; “I don’t buy cryptocurrency anymore, and I wouldn’t recommend doing so to anyone who does not like playing at a casino.”
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