Capital markets News

Russia’s Sber launches first digital asset for factoring

sber bank

On Saturday, Russia’s largest bank, Sber, announced it issued its first digital asset. The billion ruble ($16.3m) asset is backed by invoices that have been factored with SberFactoring for three months.

However, the platform is still running in pilot mode and is only allowed to support a limited number of users for now. The bank plans is to make it available to all its commercial clients.

In Russia, these real-world digital assets (as opposed to cryptocurrencies) are referred to as Digital Financial Assets (DFAs), with legislation coming into force at the start of 2021. 

When we interviewed state-controlled Sber more than a year ago, the digital assets platform was in an advanced state of development. The biggest hurdle was getting authorization to launch, which it received in March. So far, the central bank has given the green light to just two other companies, fintech Lighthouse, and Atomyze the metals trading platform associated with Nornickel.

Sber’s digital assets platform is based on enterprise blockchain Hyperledger Fabric and uses smart contracts heavily. It has its eye on doing advanced Letters of Credits involving dozens of signals. 

At the time, Oleg Abdrashitov, the head of Sberbank’s Blockchain Lab, told Ledger Insights, “The platform will be open for developers where they can deploy smart contracts, new products and do magic similar to what you have now with decentralized finance (DeFi).” Although he was keen to emphasize these are DFAs issued on a permissioned blockchain, as opposed to cryptocurrencies.

What was not mentioned in Saturday’s announcement is whether or not the first transaction used tokenized bank money for settlement. In the absence of a comment, we’d assume it did not, given the central bank has strong opinions about digital money. It has also previously raised concerns about the potential for its biggest banks to be overly dominant.

Meanwhile, Sber may have been pipped to the post in issuing the first DFA. At the end of June, startup Lighthouse executed a digital assets transaction with state-owned bank VTB, also relating to factoring.

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