Russian commercial bank Expand has issued the first crypto-backed loan in the country, taking Waves token as collateral.
Reported by local business media Kommersant on Wednesday, the news was confirmed by Waves co-founder Sasha Ivanov with a retweet.
The report detailed that the personal loan was issued to Mikhail Uspensky, an entrepreneur and a tax consultant. He bought the Waves tokens in 2018 and tried to stake them for recurring gains before approaching the bank to use them as loan collateral.
The collateralized tokens are currently being held by a third-party notary. Neither the bank nor Uspensky have disclosed the amount involved in the crypto-backed loan or the terms of the agreement.
Cryptocurrencies cannot be used for payments
Before issuing the loan, the bank had consulted with cryptocurrency experts and lawyers to ensure that Waves falls under the category of “other property” and is not a payment token.
Notably, the Russian government recently passed a law defining cryptocurrencies as property and banning their usage as a mode of payment. Already signed by Russian President Vladimir Putin, the new law will come into force from next January.
The bank’s legal departmentManilaaAndreandieva also highlighted that this first crypto-backed loan will set a precedent in the Russian legal and banking community.
Though this type of loan with digital assets as collateral is first in Russia, the United States’ crypto-focusSilverwarelvergate is already offering such loans.
Expand was previously owned by Barclays, but the UK banking giant sold it last year to local banker Igor Kim for an undisclosed sum as the bank failed to make a footprint in the market.