The Russian government’s relationship with the cryptocurrency industry has been up-and-down in the past months. This week, though, it’s obvious that the Eastern European nation is taking a hard stance against it. Just hours after the Russia crypto ban, a bank and a state-sponsored digital asset platform are rolling out a token of their own.
In the first half of the year, it was unclear how Russia would approach cryptocurrency. In January, government ministries agreed on a road map for regulations; this would create the venue through with bullish officials could work with the bearish Russian central bank to create some sort of market-friendly legislature.
President Vladimir Putin had shown interest in some areas of crypto, particularly the mining industry. But, these interests are not proving enough to get the leader all-in on crypto. Just yesterday, Putin signed into law a bill banning all crypto payments in the country. This stifles the possibility for cryptocurrencies themselves, particularly those created specifically to pay for goods and services; it also severely limits the scope of possibility for a Russian central bank digital currency (CBDC).
CBDCs have been growing like wildfire among governments around the world. They provide nations with an opportunity to compete directly with the private crypto sector with a nationalized digital asset pegged to a native fiat. This would allow for greater regulation, too — a plus for the many countries skeptical of the market.
By definitively stomping out the possibility of a CBDC, Russia is making a bold statement about where they feel the market is heading. However, they aren’t giving up on competing with the space. Today, a Russian asset manager is selling its own token; the token is hoping to push crypto “to the sidelines of the digital economy.”
Russia Crypto Ban Followed by Launch of New Industrial Token
The Russia crypto ban shows how little interest the nation has in the space. But, a new token shows how much confidence the country has in defeating the market.
Atomyze is a Russian digital asset manager. It operates for the purpose of digitizing physical assets for easy trading and tracking across the market. And it is now releasing a palladium-backed token alongside Russian bank Rosbank.
Rosbank is the first Russian banking entity to invest in Atomyze’s palladium token — the first of its many planned commodity-backed tokens. Just as it sounds, the asset mirrors the price of palladium, a precious metal of which Russia is one of the largest producers. Given Russia’s treatment of CBDCs, it is interesting to see the state’s support of these commodity-backed investments.
It is worth noting that Atomyze is a company operating with the blessing of the state. In February, the central bank gave the company the first license to issue and trade digital assets. Both it and Rosbank are backed by Interros, a conglomerate controlled by Russian oligarch Vladimir Potanin. Potanin is the second-wealthiest man in the country and a staunch supporter of Putin. He is currently sanctioned by the UK as a result of Russia’s invasion of Ukraine. It is also worth noting that Atomyze is in the midst of a global expansion; currently, the company is in the process of securing necessary licenses to operate in the United States.
Potanin is confident that the new tokenized palladium and future Atomyze commodities will cripple the cryptocurrency market. He says that unlike crypto, these commodity tokens “are backed by physical assets, and the use of blockchain technology makes their transactions reliable, convenient and transparent.” Of course, the Atomyze token isn’t the first to offer this; several gold-backed tokens already exist from the likes of Paxos, Tether and the Perth Mint.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
