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- In Russia, DFAs are characterized under the recent legislation “On Digital Financial Assets.”
- Sberbank, the largest bank in Russia and predominantly state-owned, was the leading seller of DFAs in April.
The Kommersant reported that seven issuances of digital financial assets (DFAs) amounting to approximately 1 billion rubles ($13 million) occurred in Russia last month. Although this market is currently quite small, experts referenced by the business daily suggest that significant developments may be expected by the year’s end.
In Russia, DFAs are characterized under the recent legislation “On Digital Financial Assets,” which came into effect at the start of 2021. These assets represent “digital rights” to securities or utility tokens and require an issuing entity, unlike decentralized cryptocurrencies, which have not yet been adequately regulated.
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Aiming to Mitigate Sanctions’ Effects
Sberbank, the largest bank in Russia and mainly state-owned, was the top seller of DFAs in April, followed by Alfa-Bank, the largest private bank in the country. Atomyze, which specializes in the tokenization of commodities, the fintech startup Lighthouse, and the recently licensed Masterchain are among the DFA platform operators authorized by the Bank of Russia.
Issuances totaled 2 billion rubles ($26 million) in March, occurring less than a year after organizations approved by the central bank began issuing DFAs. Despite the significant increase the following month, most experts surveyed by Kommersant remain cautious.
Roman Nekrasov, co-founder of Encry Foundation, which represents Russian IT companies, indicated that existing methods such as corporate bonds could be utilized to raise capital. The invasion of Ukraine by Moscow led to unprecedented Western sanctions that severely restricted Russia’s access to global financial markets.
In an effort to mitigate the impact of the sanctions, Russian authorities have been taking steps to enhance the use of digital assets, including permitting crypto payments in international trade and developing a digital ruble.
