Russia’s Major Banks to Offer Crypto-Based Fund for Retail Investors

Sberbank and Alfa Bank are preparing to experiment with products based on digital financial assets.

Sberbank Bitkoin offering

When it comes to cryptocurrencies, Russia has been sending mixed signals for years. While some of its institutions, and perhaps more importantly – businesses, have been more than happy to join the party; some other institutions have acted differently, even warning the general public to stay out of the crypto market.

Now we have two of Russia’s largest banks testing cryptocurrency-based investment options for retail investors, according to the recent Kommersant report. It is big news as we have major financial institutions opening up the crypto market to the wider audience.

It’s all about experimenting…

The initiative follows the Russian central bank’s launch of the “regulatory sandbox” that prompted Sberbank and Alfa-Bank to experiment with products based on “digital financial assets.” Those assets, as you can presume, are in fact cryptocurrencies — including Bitcoin, Bitcoin Cash, Ethereum and Litecoin — which will form an investment portfolio.

The move comes as Russia prepares to enact laws governing cryptocurrencies and blockchain technology that will see crypto become formally defined, legalized investment assets under Russian law.

“We want to offer our clients a completely transparent entry point for digital assets, fully in compliance with regulatory requirements and which allows investment within Russia in a product that interests them,” Sberbank’s deputy head of private banking Anna Ivanchuk told Kommersant.

From what we’re getting, the new offering will let clients withdraw to fiat at will, with crypto assets being under the control of partner Group IB through bespoke “custody solutions.” Under the deal, clients would effectively receive a share of the fund, according to Alexey Prokofiev of AddCapital, which is another partner in the scheme.

Cryptocurrency and blockchain are hot in Russia

Despite the uncertainty, crypto- and blockchain-related projects are hot in Russia.

Last year, we have seen the local Burger King office launching its very own loyalty token, WhopperCoin. Also, we’ve talked about Russian billionaires’ interest in investing in Bitcoin, and even one man’s journey to make crypto mining cheaper — by buying his own power plant.

Finally, in the more corporate space, we’ve covered the launch of the Sberbank Blockchain Lab, which was envisioned to generate product prototypes, perform pilot tests and eventually implement blockchain-based business solutions for Sberbank Group. At the time of the announcement, the bank said that the new lab will work in conjunction with its other laboratories, while also building ties with the startup community and by participating in other alliances.

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