A Russian commercial bank was the first bank in Russia to grant a personal loan on the basis of cryptographic currency tokens. In itself, Bitcoin loans are not new, but this is the first time that a commercial bank has granted such a loan. So far, only specialised FinTechs offer such services.
This was reported by the Moscow Times with reference to Kommersant newspaper.
The commercial bank Expobank informed that a few days ago, it granted for the first time an individual loan to the businessman Mikhail and accepted the token of the crypto-currency Waves as security. The amount of the loan was not disclosed.
The newspaper Kommersant reported that the bank had consulted a number of lawyers and crypto experts before the transaction. As a result, the Wave tokens were defined as “other assets” and placed in an escrow account.
Tanzila Yandieva, Expobank’s head of legal affairs, said that the conclusion of this transaction set a precedent for both the banks and the legal community.
The crypto currency Waves was released in 2016 to address shortcomings of the crypto currency Nxt. Waves is a second generation crypto currency. Unlike first-generation crypto currencies such as Bitcoin or Litecoin, Waves uses the Proof of Stake (PoS) mining concept. With PoS, a consensus on block chain transactions is not reached by solving mathematical puzzles, but by providing Waves.
Russia had previously passed its first law on crypto-currencies in summer 2020. The crypto industry criticised that the law was overly restrictive. It prohibits the use of crypto currencies as a method of payment. It also prohibits companies from advertising payments with crypto-currencies.
Expobank believes that crypto-currency tokens are suitable as collateral for loans and that this view is valid under the new Russian law.
Conclusion
The step of Expobank is a test case for the interpretation of the new Russian cryptographic currency law. Its declaration as an other asset allows the creation of book money claims, even if it is not itself used for payment.
However, the “stress test” is still pending: Namely, when this security has to be realised and the market for crypto-currencies can show whether it can manage the balancing act between a limited offer, which should secure its value, and the intention to create liquidity by selling it.
Last but not least, the acceptance of crypto currencies, not only as collateral for loans, will decisively depend on this.