Sber is the largest banking institution in Russia and it has developed a blockchain platform that is now issuing gold-based digital assets.
The price of physical gold will determine the value of the tokenized gold-based digital assets and the bank emphasized that this was the first operation of its kind.
Gold-backed coins
The largest Russian back recently announced that it has begun issuing digital financial assets (DFAs), which are based on gold and these have been issued on its proprietary blockchain.
Sber detailed that the tokens had been minted for Solfer, which specializes in trading and processing of metals and using precious metals for making products.
Companies are permitted to tokenize different assets under the Russian law titled ‘On Digital Financial Assets’, which had been put into effect in January last year.
The Bank of Russia has authorized 3 ‘information system operators’ to issue DFAs, which are Sber Bank, Lighthouse and Atomyze.
Lighthouse had issued the first DFA in Russia this year back in June. The digital financial asset (DFA), which has been issued for gold means that holders can make a monetary claim on the asset.
Sber Bank elaborated that the obligations and prices associated with the asset will depend on the prices of gold. It also noted that this is the first transaction of its kind to be conducted on the blockchain.
Diversification
The CEO of Solfer, Maxim Nazhmetdinov, said that the new digital format of gold had attracted them. He added that they had decided to diversify the balance sheet of the company in a new way.
He also added that they believe that this is a new format of making investments in precious metals, so it will not have a problem in finding a niche in the market.
Alexander Vedyakhin, the First Deputy Chairman of the Board at Sber Bank, said that this deal shows that the market is interested.
He said that this was due to the fact that the new instrument can actually turn out to be a good alternative to other investments and can also be useful for the de-dollarization of the economy.
Legal framework
Russia has been under pressure due to the sanctions imposed by the West in light of the war with Ukraine.
Therefore, the country has been gearing up to broaden its legal framework where digital financial assets (DFAs) are concerned in order to include decentralized currencies as well.
Regulators in Moscow are in agreement in their stance to not allow free circulation of cryptocurrencies like bitcoin in Russia.
However, the government is thinking about legalizing cross-border payments with cryptocurrencies. Even the Russian central bank has gotten on board with this stance.
This is despite the fact that the Bank of Russia has opposed cryptocurrencies since the beginning and has even suggested a blanket ban.
Since Sber wants its blockchain platform to be accessible to corporate clients, it is planning on expanding its DFA product line down the road.
The bank will also permit people to use its blockchain platform for conducting digital asset transactions from next year.