Russia’s Sberbank Takes on Crypto with Cross-border Money Transfer App

Bank Banking Cryptocurrency

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 25, 2023

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Russian major bank Sberbank has introduced a new low-cost, cross-border remittance solution that it believes will be able to compete with cryptocurrency for cross-border transactions.

The bank, once the Russian financial sector’s fiercest advocate of cryptocurrencies, announced earlier this year that it was turning its back on cryptocurrencies, citing the lack of regulatory framework as its reasoning.

But now, reports LetKnow News, Sberbank has unveiled details about a solution it thinks can dispel the need for cryptocurrencies in at least one financial sector.

The company will release a mobile app for a platform it says can “process payments to any country in the world,” to individuals or corporate accounts, with a commission fee of 1%. The platform allows users to send a maximum of around USD 4,700 per day.

The same media outlet quotes Pavel Vrublevsky, the founder of Russian payments firm ChronoPay, as stating that Sberbank’s solution is a “real breakthrough.”

The ChronoPay chief said,

“I won’t be surprised if this move somewhat reduces the demand for cryptocurrencies in Russia. It’s no secret that cryptocurrencies are often used to withdraw funds. In many cases, there is no issue about the legality or otherwise of [cryptocurrency] transactions. Instead, it’s often the bureaucratic complexity of the overseas transactions procedure [that forces people to choose cryptocurrency for international transactions].”

Earlier this year, Sberbank sent a Russia-based customer a notice, asking them to declare their cryptocurrency earnings to the country’s tax authorities.

As previously reported, financial companies are currently stepping up their act in a bid to cut fees and speed up transaction times – as individuals and companies increasingly turn to Bitcoin and altcoins as cross-border transaction solutions.

Earlier this month, Ripple released an advertisement that highlights the alacrity and efficacy of crypto transactions – and appears to showcase a platform not unlike what Sberbank looks to be proposing.

A 2018 Ripple brand awareness advertisement seemingly derided the slow, costly and ineffective nature of the banking sector’s cross-border conventional transaction solutions.

Regardless, many crypto advocates will argue that crypto, which runs 24/7, still has the edge over any conventional banking platform, Sberbank’s solution included – with higher transaction speeds, fees that still might be lower and no limits on transaction size.

Learn more:
International Money Transfer: Western Union vs World Remit vs Bitcoin
G7 Going to War Over Control of Money, Says ‘Bitcoin Failed’