Russia’s Sovcombank launches bitcoin (BTC)-backed loan product…first among major banks

JH Kim

Summary

Sovcombank, Russia’s ninth-largest bank, said it has formally launched a bitcoin-collateralized loan product.
The bank said the product is available only to companies and individuals that legally hold cryptoassets.
The launch is seen as a case of a traditional financial institution officially recognizing cryptoassets as eligible collateral, and it noted that the potential for adoption by other banks is drawing attention.

Sovcombank, Russia’s ninth-largest bank, has launched a loan product backed by bitcoin (BTC). It is the first time a major Russian bank has marketed bitcoin-collateralized loans as a formal product.

According to CoinDesk, a cryptocurrency-focused media outlet, Sovcombank Compliance Head Marina Burdonova said on the 5th (local time), “We launched a bitcoin-backed loan product so customers can raise funds for business development without selling their assets.”

She added that “only companies and individuals who legally hold cryptoassets are eligible to use the product,” explaining it is offered only to users who meet regulatory requirements. Specific terms, including the loan structure and interest rate, were not disclosed.

In Russia’s financial sector, cryptoasset-based financial services are gradually expanding. In December last year, Sberbank, Russia’s largest state-owned bank, introduced a bitcoin-collateralized lending service, but it has so far been operated as a pilot program.

Sovcombank’s latest launch is seen as a case of a traditional financial institution officially recognizing cryptoassets as eligible collateral, drawing attention to the potential for adoption by other banks.