Banking In Russia Sber Launches Gold-Backed Digital Financial Asset

Key Points:

• Sber considers this is the first wave of gold-backed digital financial assets via its distributed ledger platform (DFA).

• The issue constituted the bank’s second big operation with the new asset class.

• The bank would offer up to 150,000 DFAs for sale to potential investors

Sber — formerly known as Sberbank — Russia’s largest bank — reported the first issuing of gold-backed digital financial instruments (DFAs). The bank sees DFAs as a “wonderful alternative” to investing during the dedollarization process.

Sber (previously Sberbank), Russia’s largest state-owned commercial bank, has released the first wave of gold-backed digital financial assets via its distributed ledger platform (DFA). Investors include diversified metal dealers and processors, as well as OOO Solfer, a precious metal product maker. Digital financial assets are sometimes referred to as digital financial instruments. To ensure that the data remains intact, they are issued, recorded, and circulated using a distributed ledger. A gold-backed DFA is one that proves monetary rights whose price and quantity are determined by the price of gold.

According to the legal filings, the financial institution would make up to 150,000 DFAs available for purchase by interested parties. The cutoff date for DFA purchases is the 30th of July in 2023. This issuance eventually became the second largest category of new asset activity for the bank and developed to become the largest category overall.

Existing DFA laws became effective in the year 2020; however, in July 2022, legislation was signed into law by Russian President Vladimir Putin that placed restrictions on the usage of digital financial assets as a mode of payment.

In June, a division of another Russian state-owned bank called VTB Factoring said that it had completed its first significant transaction involving digital finance assets. As part of the deal, the bank’s subsidiary bought a tokenized debt pool that had been developed by the engineering company Metrowagonmash and distributed through the fintech platform Lighthouse. Later in the month of July, Sber carried out its first DFA test, releasing three-month assets with a value of 1 billion roubles (about $14.5 million at the time of publication).

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