Russia’s largest bank Sber has partnered with Solfer – a processor of precious metals – to launch gold-backed digital financial assets (DFAs). The move is part of the faster adoption of cryptocurrencies by the majorly government-owned bank. Russia is battling sanctions – including restricted access to foreign reserves – from Western countries following its invasion of neighboring Ukraine.
See Related: Will Russian Banks Blocked From SWIFT Turn To Crypto?
‘Certifying Monetary Rights’ Pegged to the Price of Gold
On its website, Sber has described DFAs as digital financial instruments based on a distributed ledger. The digital assets are certifying monetary rights, where the price and volume are pegged to the price of gold. The financial institution is hopeful that the tokenized asset will find use cases in the market and is ideal for diversifying its balance sheet.
See Related: Russian Legislators Propose A National Cryptocurrency Exchange
According to Alexander Vedyakhin, first deputy chairman of the Executive Board at Sberbank, ”The deal demonstrates that the market and the real economy are interested in the new instrument, which may be a great alternative to investments amid de-dollarization. We expect the number of corporate clients on our platform to grow rapidly and plan to expand the product line of digital financial assets.”
Issuance Dates And DFAs’ Investment Risks
In the juridical documents accompanying the issuance, the number of DFAs to be issued by the bank is 150,000. The application window has been open since December 9th, and placement of the digital assets will begin on June 30th, 2023.
The Issue Resolution has outlined risks related to the DFAs, cautioning the possibility of losing part or all of one’s investment. Some of them include market risks that could change the value of the DFA, a lack of liquidity, and bankruptcy risks.
