One of the significant proponents of Blockchain technology, Sberbank, aims to launch a Decentralised Finance (DeFi) platform within the next few months. According to a local news agency, Interfax, it noted that Russia’s national bank is ready to dive into Ethereum’s permissionless ecosystem.
Sberbank, Russia’s largest bank, is stepping into DeFi with plans to launch its DeFi platform on the Ethereum blockchain. https://t.co/HWJI1jNM0p
— Cointelegraph (@Cointelegraph) February 4, 2023
The bank’s blockchain director, Konstantin Klimenko, revealed at the Perm Economic Congress in Moscow that it expects to launch open trials of its DeFi platform by May this year. He noted:
We have set a big goal to make the Russian DeFi space number one.
However, the company will be compatible with Ethereum because users can log onto it using MetaMask wallets, according to Klimenko. Additionally, they plan to integrate the project with the Ethereum network. These will enable the seamless transfer of smart contracts and other projects within the Ethereum ecosystem. However, it is worth questioning why Klimenko stipulates the company as ‘decentralized’ while Sberbank is state-owned.
According to the Product Director of the blockchain Laboratory, the Russian majority state-owned bank plans to roll out the project in multiple steps. Based on statements by Klimenko, the project was in closed beta testing, with open testing set to commence in March. Speaking on Friday, he noted:
As of March 1, we are moving into the next phase, and it will no longer be beta testing but open testing. At the end of April, the platform will be fully open, and it will be possible to carry out various commercial operations on it.
Decentralized Finance firms enable users to carry out banking transactions, including lending, investing, and saving, based on the blockchain, technology, or distributed ledger. However, various entities have come out applauding and critiquing the platforms’ plan. Some of the multiple advocates stipulated that the project could decrease banking costs and even eventually replace traditional banks.
However, some individuals raised critics, saying the system suffers similar drawbacks as the crypto space, including lack of regulation and exposure to fraud and money laundering. Additionally, some individuals noted that the system has few real-world uses. However, traditional finance companies aim to get into the ecosystem and integrate DeFi technology with their existing regulated operations.
It is worth noting that this is not the first time Sberbank has shown interest in blockchain technology. In December 2021, Sber Asset Management, the investment arm of the country’s largest bank, revealed the launch of the first blockchain-themed exchange-traded fund. The company’s blockchain-focused ETF, dubbed “Sberbank-Blockchain Economy’’enabled track the identically named index developed by the banks’ asset management subsidiary SberCIB.
The fund provides the country resident’s investors exposure to a diversified portfolio of significant blockchain firms, including Galaxy Digital and Coinbase. Additionally, it tracks the performance of crypto mining platforms facilitating consulting services in the blockchain ecosystem.
In the press release, Sber Asset Management CEO Evgeny Zaitsev noted:
“Direct investments in crypto assets are associated with high risks, so dealing with them on your own is difficult. We offer to invest not in crypto assets but in platforms focused on developing blockchain technologies.”
Sber bank is the country’s largest and third largest in Eastern Europe. In 2021, the bank had $559 billion in assets under management. However, last year, the bank accounted for almost a third of all platform assets in Russia. In March 2022, the Moscow-based lender reportedly obtained a license from the Bank of Russia to offer its crypto-related services, including issuing its digital token.
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