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Gazprombank of Russia Set to Integrate Cryptocurrency into its Operations

Gazprombank of Russia Set to Integrate Cryptocurrency into its Operations

Reading Time: 2 minutes by on April 4, 2018 Business, Finance, News
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At a time when things are not too rosy for the crypto ecosystem, and no one can say for sure when the markets will become green again, Russia’s Gazprombank is set to run a cryptocurrency pilot in crypto-friendly Switzerland.

Gazprombank’s Crypto Ambition

When many institutional investors are busy carrying out blockchain tests and shying away from virtual currencies, Russian media outlet Vedomosti has reported that the state-owned Gazprombank has caught the crypto fever and is looking to carry out its blockchain money pilot in Switzerland before the end of 2018.

According to one of the bank’s top chiefs, Alexander Sobol, the third biggest bank in Russia by asset base is poised to trial cryptocurrency in a bid to take advantage of the excellent properties inherent in blockchain-powered currencies to serve its clients better. In his words:

“Some kind of pilot… It will not be on a grandiose scale… There is a demand from large private clients for such services. Therefore, we are now looking at how we can organize this service for them.”

The board member did not say whether the bank was trying to adopt one of the established cryptocurrencies or if the state-owned financial institution was attempting to thread same paths with some of its counterparts who are developing digital currency versions of their national currencies.

However, the stakeholder stated it categorically clear that the Gazprombank crypto project will not be conducted in Russia due to regulatory bottlenecks. Instead, the pilot would be organized in Switzerland where there is a more vibrant digital currency ecosystem. Sobol also hinted that the bank is on the verge of deciding whether its crypto-based service would be focused mainly on satisfying the yearnings of customers or if it would be used to serve more internal purposes.

Gazprombank Switzerland Grounded

In February, reports emerged that Swiss-based subsidiary of Gazprom, Gazprombank Switzerland, got into trouble for not conducting proper KYC and anti-money laundering (AML) checks on its clients.

According to Reuters, the Financial Market Supervisory Authority (FINMA) has since banned the bank from accepting new private clients until further notice. “The bank failed to carry out adequate economic background clarifications into business relationships and transactions with increased money laundering risks. No new relationships with new private clients may be accepted, and existing relationships must be strictly monitored,” an excerpt from the FINMA statement read. Whether the Gazprombank Switzerland will still be able to conduct the pilot test remains to be seen.

Gazprombank Russia is not the only state-owned bank that has become interested in experimenting with cryptocurrencies. On February 4, 2018, BTCManager reported that Russia’s most significant state bank was putting preparations in top gear to launch a cryptocurrency exchange platform in Europe.

Even with the recent cryptocurrency market slump, 2018 could still turn out to be another excellent year for the digital currency ecosystem as ‘hodlers’ remain unperturbed by the negative price movements and more and more institutional investors seem to be carrying out various crypto pilots. Will the excitement and enthusiasm of 2017 return to the markets this year? Only time will tell.

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