• Sun. Jul 21st, 2024

VTB Bank, one of Russia’s largest banks, has achieved a milestone in the country. It conducted the first cash-backed virtual financial asset payment with a fintech firm.

According to Reuters, the fintech firm, Lighthouse, carried out the transaction. Lighthouse is a subsidiary of VTB Factoring and has a license to exchange virtual assets.

VTB noted that;

“The first electronic financial assets backed by cash were issued and placed on our platform.”

Also, the firm compared the transaction to issuing a short-term commercial bond. The report says the firm issued 10,000 tokens at 500 rubles ($9.87) for each token.

The engineering firm Metrowagonmash was tokenized on Lighthouse’s platform as part of the transaction. Afterwards, VTB Factoring purchased the tokens.

Anton Musatov, CEO of VTB Factoring, stated that:

“The new commercial debt financing technology significantly simplifies access to funding for Russian businesses.”

Russia Approves Bill Exempting Crypto Issuers From VAT 

On June 29th, the Russian parliament approved a law on crypto tax. Also, the law excludes crypto issuers from paying taxes. 

According to Be[In]Crypto, the previous law enforced a 20% tax on crypto transactions. However, the latest law reduces it to 13% for local firms and 15% for foreign companies. 

The latest development contradicts the earlier of Russia’s central bank toward cryptocurrencies. However, the Finance Ministry has been clamoring for regulation instead of a total ban. 

In December 2021, the central bank banned mutual fund agencies. This barred them from investing in cryptocurrencies. 

However, recent sanctions have turned the tides. The country had to consider using cryptocurrencies for international payments.

Western Sanctions Push Russia To Embrace Crypto 

Since Western nations imposed sanctions on Russia, the country has been looking for alternatives. Also, the economic downturn in the country has pushed the country towards blockchain technology.

According to reports, a Rostec Group is working to bypass SWIFT restrictions using blockchain technology. In May, the Deputy Governor of Russia’s central bank, Ksenia Yudaeva, stated that:

“The central bank does not have any objection to the use of digital currencies for international payments.”

According to Andrey Kostin, CEO of VTB Bank, these Western sanctions affect 75% of banks. They have been unable to make international transactions and get financial assistance.

Meanwhile, Bloomberg reported that Russia has also reneged on its external sovereign debt. This is the first time such is happening. This might be due to the increasing financial woes in the country.

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