Russian Top Digital Bank Tinkoff Explores Crypto Investment Services - Blockchain.News

Russian Top Digital Bank Tinkoff Explores Crypto Investment Services

Despite Russia’s Central Bank imposed ban and restrictions on cryptocurrency usage in the country, Tinkoff bank is examining potential cryptocurrency investments services to offer to its clients.

  • Nov 01, 2021 11:51
Russian Top Digital Bank Tinkoff Explores Crypto Investment Services

Tinkoff Investments, the brokerage services platform arm of Russia’s largest online bank, Tinkoff, is researching cryptocurrency investment services despite Russia’s Central Bank withholding the bank from launching such services.

The head of Tinkoff Investments, Dmitry Panchenko, engaged in a recent interview with local news agency TASS and revealed that the brokerage platform is currently working on research and development initiatives focusing on cryptocurrency-related services.

He, however, did not elaborate in detail, stating that it is too early to talk about specific project ideas. Panchecnko noted that they are still at the research stage and are examining certain cryptocurrency investment services, and therefore have not come up with a specific framework for such products.

Though Panchenko admitted that “brokers cannot offer this service by law” in Russia, he stated that Tinkoff Investments is potentially setting the stage of research and developments in terms of possible approaches. He explained that Tinkoff Investments is particularly considering crypto products like those being offered by firms like international payment giant PayPal and crypto-friendly apps such as Robinhood and Revolut.

Panchenko said that:

“We are looking at what is happening in the world with Robinhood, Revolut, PayPal. We see this evolution, but in Russia, this is not happening yet.”

The bank’s executive stated that although local authorities have still now allowed firms like Tinkoff Investments to offer crypto investments services, he said that the citizens of Russia are still actively trading cryptocurrency on foreign platforms.

Panchenko disclosed that Russian citizens had invested more than $15 billion worth of cryptocurrencies on foreign exchanges despite the restrictions.

The executive mentioned that brokerages such as Tinkoff are well placed to benefit from adopting cryptocurrency investment services. He stated that Tinkoff has witnessed rising demand specifically for investments in cryptocurrency instead of using cryptocurrency to pay for goods and services, which is prohibited in Russia by the nation’s crypto law “On Digital Financial Assets.” There are central bank-imposed restrictions that bar non-qualified investors looking to invest or buy digital assets.

Earlier this year, the country created a legal definition of crypto assets under its Digital Financial   Assets (DFA) law.

Despite such legal bans and restrictions, Pancheko said it is important for brokers to make crypto assets available to investors alongside other investment instruments such as bonds and stocks.  

“We see demand for investment purposes – not to use it as a means of payment or a means of transporting assets, but as an investment instrument for investments and potential profit,” he stated.

 While Russian rules are likely to remain prohibitive shortly, Pancheko stated that Tinkoff Investments might look at alternative approaches to invest in cryptocurrencies.

Tough Central Bank Policy

In June, as reported by Blockchain.News, Tinkoff bank announced that it wanted to provide crypto trading to its customers but stated that it would take time because of a tough stance from the country’s central bank.

On June 3, Tinkoff CEO, Oliver Hughes, stated that qualified investors who understand what they are doing want to invest in cryptocurrencies in Russia. He mentioned currently, there is no mechanism for the bank to provide cryptocurrencies to its clients because the central bank has maintained a tough stance.

In 2020, Russia gave crypto assets legal status but banned them from being used for payments, stating that only the Russian ruble could be regarded as legal tender.

In late May, Elvira Nabiullina, the governor of Russia’s central bank, stated that digital currency was the “future of the country’s financial system,” referring to the Central Bank Digital Currencies (CBDCs) but not the Central Bank Digital Currencies (CBD cryptocurrencies.

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