Tinkoff Bank’s Parent Firm Wades into Crypto with Aximetria Purchase

Despite the strict stance of Russian market watchdogs over the digital currency ecosystem, TCS Group, the parent company of private Russian bank Tinkoff has made a majority acquisition in Aximetria, a startup that offers users an opportunity to invest in cryptocurrencies.

Founded in 2018 by Alexey Axelrod, Aximetria ranks as one of the first sets of crypto players operating in Switzerland to be offered the FINMA (Swiss Financial Market Supervisory Authority) license to process transactions involving cryptocurrencies and cash transactions. The value of the deal between TCS Group and Aximetria remains unknown, and there is no clarity as of the time of writing on how the company hopes to maximize its stake in the Swiss startup.

“Aximetria will develop as part of the international expansion of the Tinkoff Group in compliance with all the requirements of the jurisdictions of international presence. The details of the deal will be disclosed in accordance with the accepted standards of disclosure in the Group’s annual reports,” the company told local news channel, The Bell.

The growth of cryptocurrencies has pushed several players in the traditional finance industry to begin exploring avenues to get involved and offer crypto-related services to their customers. The acquisition of Aximetria reiterates the plans by the TCS Group to find a solution as the company’s Chief Executive Officer, Oliver Hughes said in an interview with CNBC last year that customers are demanding crypto offerings of which the firm has no mechanism to offer due to strict regulations.

The Aximetria acquisition will serve as the very first time the Tinkoff Group will be wading into crypto, and while the deal may be subject to regulatory scrutiny, it is a clear indication of how traditional banks are enthusiastic to defy guidelines in order to tag along with current trends in financial innovation. 

Just like Tinkoff is trying to position itself to offer crypto services, Kookmin Bank, the largest commercial bank in South Korea took the initiative to start offering crypto services as far back as August 2020, reinforcing the fact that the move is fast becoming a global trend.

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Russian Top Digital Bank Tinkoff Explores Crypto Investment Services

Tinkoff Investments, the brokerage services platform arm of Russia’s largest online bank, Tinkoff, is researching cryptocurrency investment services despite Russia’s Central Bank withholding the bank from launching such services.

The head of Tinkoff Investments, Dmitry Panchenko, engaged in a recent interview with local news agency TASS and revealed that the brokerage platform is currently working on research and development initiatives focusing on cryptocurrency-related services.

He however did not elaborate in detail, stating that it is too early to talk about specific project ideas. Panchecnko stated that they are still at the research stage and are examining certain cryptocurrency investment services, and therefore have not come up with a specific framework for such products.

Though Panchenko admitted that “brokers cannot offer this service by law” in Russia, he stated that Tinkoff Investments is potentially setting the stage of research and developments in terms of possible approaches. He explained that Tinkoff Investments is particularly considering crypto products like those being offered by firms like international payment giant PayPal and crypto-friendly apps such as Robinhood and Revolut.

Panchenko said that:

“We are looking at what is happening in the world with Robinhood, Revolut, PayPal. We see this evolution, but in Russia, this is not happening yet.”

The bank’s executive stated that although local authorities have still now allowed firms like Tinkoff Investments to offer crypto investments services, he said that the citizens of Russia are still actively trading cryptocurrency on foreign platforms.

Despite the restrictions, Panchenko disclosed that Russian citizens have invested more than $15 billion worth of cryptocurrencies on foreign exchanges.

The executive mentioned that brokerages such as Tinkoff are well placed to benefit from the adoption of cryptocurrency investment services. He stated that Tinkoff has witnessed rising demand specifically for investments in cryptocurrency as opposed to using cryptocurrency to pay for goods and services, which is prohibited in Russia by the nation’s crypto law “On Digital Financial Assets.” There are central bank-imposed restrictions that bar non-qualified investors looking to invest or buy digital assets.

Earlier this year, the country created a legal definition of crypto assets under its Digital Financial   Assets (DFA) law.

Despite such legal bans and restrictions, Pancheko said that it is important for brokers to make crypto assets available to investors alongside other investment instruments such as bonds and stocks.  

“We see demand for investment purposes – not for the purpose of using it as a means of payment or a means of transporting assets, but as an investment instrument for investments and potential profit,” he stated.

 While Russian rules are likely to remain prohibitive in the near future, Pancheko stated that Tinkoff Investments may look at alternative approaches to invest in cryptocurrencies.

Tough Central Bank Policy

In June, as reported by Blockchain.News, Tinkoff bank announced that it wanted to provide crypto trading to its customers but stated that it would take time because of a tough stance from the country’s central bank.

On June 3, Tinkoff CEO, Oliver Hughes, stated that qualified investors who understand what they are doing want to invest in cryptocurrencies in Russia. He mentioned currently there is no mechanism for the bank to provide cryptocurrencies to its clients because the central bank has maintained a tough stance.

In 2020, Russia gave crypto assets legal status but banned them from being used for payments, stating that only the Russian ruble could be regarded as legal tender.

In late May, Elvira Nabiullina, the governor of Russia’s central bank, stated that digital currency was the “future of the country’s financial system,” referring to the Central Bank Digital Currencies (CBDCs), not cryptocurrencies.

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