Sber, Russia’s largest bank, announced that the institution entered a key partnership with the financing giant JPMorgan for the development of a digital currency. Sber’s CEO Herman Gref, confirmed that the possible name for the new digital currency would be Sbercoin. The bank, which has over 100 million users, revealed its plans back in August, but now receives the support of the largest bank by assets in the United States — JPMorgan.
However, Sber’s CEO didn’t post a strict timeline for the release. He noted that Sbercoin would begin operations “as an experiment,” without clarifying whether or not the project would be carried beyond the pilot stage.
Sber’s partnership with JPMorgan can prove to be strategic, as the U.S.-based lending giant already developed and deployed its own digital asset, dubbed JPMCoin back in February 2019. The currency deployment allowed instant interbank payments to be processed.
Also, JPMorgan became the first large-scale bank in the United States to offer banking services to crypto exchanges Gemini and Coinbase in May 2020. The bank also made a deal to sell its Quorum blockchain platform, which means JPMCoin would continue its development outside the bank, with 200 bank members already onboarding the blockchain.
Meanwhile, the Russian government announced an update to its currency law, coming into force from January 2021. The Digital Financial Assets (DFA) law was passed in July 2020 and gives cryptocurrencies a legal status in Russia, but prohibits the use of cryptos as a means of payment.
The crypto usage prohibition means Russians are still eligible to operate on crypto-to-crypto exchanges, as well as allowing companies to purchase, sell, and lend/borrow in cryptocurrencies, while general transactions would remain illegal. Furthermore, the Central Bank of Russia published a draft, which describes the creation and deployment of digital rubles, which are denoted as “a third form of money.”
However, Sber’s actions may end up further than the Central Bank of Russia`s initial plans. Sber wants to add a tracking number to all digital rubles, as well as to utilize smart contracts for settling payments. According to Finance Magnates, the ruble tracking and smart contract settlement would give commercial banks like Sber the ability to maintain the account for non-fiat currencies, rather than Russia’s Central Bank.
Sberbank is already under development of its own blockchain, built on Hyperledger Fabric. The core design of the new blockchain would allow trading financial transactions, including exchanging letters of credit. The blockchain would run on Sber’s own cloud service — SberCloud, which will grant companies access to set up their own nodes in the cloud.
Sber’s announcement seems a direct follow-up to Raiffeisen Bank International (RBI)’s plans to launch a private digital currency, which was disclosed in June 2020. Stefan Andjelic, RBI’s blockchain hub lead, however, noted that “CBDCs wouldn’t be enough” for Raiffeisen’s plans of tokenization. The bank partnered with Billon in order to develop its own tokenization protocol.