Gazprombank To Test Pilot Cryptocurrency Program In Russia

By Tabassum Naiz | April 3, 2018

Gazprombank Cryptocurrency Initiative

Gazprombank, the third largest bank in Russia, which also happens to be a state-owned bank is testing a pilot program to commence cryptocurrency transactions in Switzerland. During an interview with the Interfax news agency, Gazprombank deputy chairman Alexander Sobol said that the cryptocurrency initiative is a response to the steady demand by its private clients. Nevertheless, this move raises some suspicions on the part of cryptocurrency enthusiasts who have warned about the perils of state-backed or state-controlled cryptocurrencies or any meddling by states in cryptocurrency transactions.

The Gazprombank Plan

Gazprombank’s plan is not clear yet. Sobol asserted that “This will not be on a grand scale, but for ourselves. This is a demand from our large private clients for such amenities. Therefore, we are now looking at how we can organize this service for them.” However, there is no indication of whether the bank itself will invest in cryptocurrencies or allow its customers to do so. Sobol said, “we are trying to follow the situation actively”.

Digital Financial Asset Law in Russia

According to Russian blog and as per the earlier statement of Vladimir Putin, State Duma will be looking closely to adopt a law “On Digital Financial Assets” that will present the rules and restrictions for the cryptocurrency market in Russia. This cryptocurrency legislation will have two draft laws and will regulate and limit ICOs and other aspects of cryptocurrency. This, coupled with Gazprombank’s cryptocurrency initiative, may signal heavy intervention by Russian authorities in cryptocurrency-related endeavors, which can lead to a situation in which citizens who do not go through the official channels to obtain and deal with cryptocurrency, might find themselves on the wrong side of the system.

Gazprombank’s Program

Nevertheless, Gazprombank’s plan is in motion. If the pilot program happens, it will be operated through a Swiss subsidiary. Sobol said, the study on cryptocurrency is already in process and by activating it through a Swiss subsidiary, the bank will enjoy Switzerland’s relatively permissive regulatory environment. Switzerland has more liberal legislation when it comes to cryptocurrency but presently cryptocurrency transactions are not regulated by law.

Other Russian Banks Dabble in Crypto

In early 2018, another bank “Sberbank” announced its plan to launch its own cryptocurrency exchange in its Swiss branch, Sberbank Switzerland AG. This announcement followed Russian regulation on cryptocurrency operations during that time, which prohibited cryptocurrency exchange. This activity is legal in Switzerland.

There was also a time when Russia was launching its own-stated owned cryptocurrency with name “CryptoRuble” to deal with U.S Economic sanctions. In fact, one of the Russian Internet ombudsmen Marinichev is setting up a Russian Mining Centre to increase mining efficiency tenfold. This shows how official Russian sentiment towards cryptocurrencies has shifted. It appears that authorities in that country have realized that they cannot fight the phenomenon, so they might as well try to control it.

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