Since Russia began its war on Ukraine, a host of restrictions have been imposed on the country, cutting it off from most of its foreign currency reserves and the global financial system.
In the midst of all this, Russia’s biggest bank launched a cryptocurrency.
In early March, just days after the invasion began, trading in Sberbank shares was halted in London after they plummeted 95%. The lender was ordered to close its European business as Western sanctions threw Russia’s economy into disarray.
But just two weeks later, on March 17, the Russian central bank granted Sberbank a license to issue its own cryptocurrency, according to media reports. That led to the launch of sbercoin the same day.
Russia is seen as struggling to meet dollar-denominated debt obligations, and it has said it will demand payment for its energy in rubles.
Against that backdrop, there has been speculation the sbercoin could become a quietly condoned way to exchange rubles for other currencies, and get around constraints.
But the feasibility of this is debatable, according to Asheesh Birla, general manager at blockchain-based payments service provider RippleNet.
“It’s going to be super-problematic for them to get much traction here, because they also need a liquid exchange that is going to take the Russian ruble,” he told Insider.
The sanctions sparked a plunge in the ruble, and prompted Moscow to bring in capital controls. Russians scrambled to protect their wealth in foreign currencies, and a black market in dollars and euros emerged.
Birla pointed out that while Sberbank can launch a cryptocurrency, it might not help move cash in and out of the country.