The largest bank in Russia introduces a crypto DeFi platform

Sberbank, the largest lender in Russia and a sanctioned institution, intends to introduce a decentralized finance (DeFi) platform soon.

Observers interpret the bank's action, which was reported by the Russian news agency Interfax, as a bid to get over sanctions and finance a crippled Kremlin-supported sector of the economy with foreign currency.

The DeFi, according to its critics, has few practical applications and shares many of the same problems as the crypto world, including a lack of regulation and susceptibility to fraud and money laundering.

The Ethereum blockchain, the second-largest cryptocurrency by market capitalization after bitcoin, will serve as the foundation for Sberbank's DeFi platform, according to Klimenko on Friday.

"What could possibly go wrong?" a commenter asked. "As if crypto doesn’t have a bad enough name right now. It is most likely a method to circumvent sanctions on the bank and the Kremlin. It is inherent with money laundering risk. I can see any number of bad actors, criminal and State, piling in on the back of this."

The information was released as the European Commission was preparing to impose a tenth wave of sanctions on the anniversary of Russia's invasion of Ukraine. The focus, according to Finance Commissioner Mairead McGuinness, will now be on enforcing sanctions and determining how they are being circumvented.

Sberbank stated that it is currently beta testing its own platform in an effort to make the Russian decentralized financial system the best in the world.

Based on distributed ledger, or blockchain technology, decentralized finance platforms enable users to carry out standard banking operations including lending, saving, and investing.

Advocates claim that it might lower banking expenses and ultimately take the place of conventional banks.

Traditional financial institutions are investigating ways to enter the market and use DeFi technology into their currently regulated business practices.

According to Konstantin Klimenko, head of products at Sberbank's blockchain lab, the bank will begin open testing of its platform in March and hopes to begin doing business by the end of April.

By fLEXI tEAM