Since Russia started its war on Ukraine, a massive amount of restrictions have been imposed on the country, cutting it off from the global financial system. In return, Russia’s largest bank launched a cryptocurrency.
In March, shortly after the invasion took place, trading in Sberbank shares was stopped in London, after they plunged 95%. The lender was given an order to close its European business as Western sanctions sent Russia’s economy into mayhem. The sanctions sent the Ruble plunging and caused an emergence of a black market in dollars and euros in Russia.
Two weeks later, the Russian central bank allowed Sberbank to issue its own cryptocurrency, according to media reports. On the same day, March 17, the sbercoin was launched.
According to analysts, Russia wants to use sbercoin to exchange rubles for other currencies, and escape constraints. But the possibility of doing this is debatable, according to Asheesh Birla, general manager at blockchain-based payments service provider RippleNet.
“It’s going to be super-problematic for them to get much traction here because they also need a liquid exchange that is going to take the Russian ruble,” he told Insider.
Stablecoins like tether and USDC are popular — in the top five cryptocurrencies by market value, according to CoinMarketCap data — because exchanges use them to trade into and out of other cryptocurrencies.
“It’s like taking your own bank account and putting it onto a ledger. It’s not all that useful unless you can start trading it for other things. And so far, the data I saw is that it’s not very liquid,” he added.
Sbercoin started trading at $0.0003617 on March 17, and its trading volume in the 24 hours after the launch was just under $948,000, according to CoinMarketCap data. The coin, which mainly trades on Pancakeswap, is down around 90% since then at $0.00002211, and its 24-hour trading volume stood at $1,248 as of 12:30 p.m. ET Friday.