World First, Sber Releases Gold Backed Digital Currency Edition

JAKARTA - Russia's largest bank, Sber or previously known as Sberbank, announced the first edition of its gold-backed digital financial assets (DFAs). The bank considers DFA a “good alternative” for investments amid de-dollarization.

On December 26, Sber published news about the first edition of the gold-backed DFA. Diversified metals seller and producer Solfer became the first investor to acquire the issued assets.

Gold-backed DFAs represent certification monetary rights, whose price and volume depend on the price of gold.

According to the issuance of juridical documentation, the bank will provide up to 150.000 DFA for potential investors to purchase. The DFA will be available for acquisition until July 30, 2023. The document mentions “high risk” to investors, embedded in such assets, including “illiquidity risk”.

First Deputy Chairman of the Executive Board at Sber, Alexander Vedyakhin, claims this kind of DFA as an alternative to traditional investments amid de-dollarization, caused by international financial sanctions, imposed on Russia after the invasion of Ukraine.

“We expect the number of corporate clients on our platform to grow rapidly and plan to expand the product line of digital financial assets,” said Vedyakhin, quoted by Cointelegraph.

While the current law on DFA was enacted in 2020, in July 2022, Russian President Vladimir Putin has signed a law into law banning digital financial assets as a method of payment.

In June, a subsidiary of another Russian state-owned bank, VTB Factoring, reported its first major deal with digital financial assets. As part of the deal, the bank's subsidiary acquired a pool of tokenized debt from engineering firm Metrowagonmash, issued via fintech platform Lighthouse.

Sber had already tested its first deal involving DFA in late July, to issue 1 billion rubles ($2.2 billion) in three-month assets.