Expobank Sets Precedent in Russia by Issuing the First Crypto-Backed Loan
Russian commercial bank Expobank has set the ball rolling in this nation by issuing a loan secured by crypto tokens. A Russian businessman Mikhail Uspensky used Waves crypto tokens as collateral to get this loan, according to local news outlet Kommersant.
Cryptocurrency deemed other property
Before the deal was sealed, Expobank consulted several crypto experts and lawyers, and it was concluded that Waves tokens served as other property. As a result, the tokens were placed in an escrow account for the loan to be released.
According to Russian law, the escrow mechanism is touted as one of the best methods of quickly meeting the creditor’s obligations when transferring property in the form of deposited digital assets.
The head of the legal department of Expobank, Tanzila Yandieva, noted:
“The transaction is a precedent in nature for both the legal and the banking community.”
After the Digital Financial Assets (DFA) bill saw the light of day in July, the buying and selling of cryptocurrencies were given the green-light. Later on, Russia’s biggest bank Sberbank disclosed the possibility of issuing tokens in the form of a stablecoin to be pegged to the nation’s currency, the Russian ruble. They were to be used in DFA settlements.
The booming DeFi market
Uspensky acknowledged that the growing decentralized finance (DeFi) market has allowed people to pledge digital assets in exchange for cash. Nevertheless, this process was cumbersome with Waves tokens, but after securing the loan, they proved to be a game-changer. He stated:
“I don’t refuse plans to use Waves, and I don’t see any point in selling tokens, but they should not be dead weight in my pocket, but should work.”
Russia has been making notable strides in the crypto space as the DFA bill has prepared the ground though it prohibited using cryptocurrencies as a means of payment.
According to the founder of LFCS (Legal Support) Yuri Brisov, Waves tokens ought to be absolutely legal in Russia as there is no restriction on the circulation of non-payment tokens.
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