This article briefly:
·Digital Financial Assets (DFA) are becoming an increasingly popular way for Russian businesses to raise funds.
·Now, the Moscow Stock Exchange hopes to launch its own DFA functionality by the end of this year.
Some government officials worry that if DFA becomes too integrated into stock exchanges, it could eliminate any distinction between digital assets and traditional securities.
Russia’s Moscow Stock Exchange hopes to start issuing and trading digital financial assets by the end of this year.
If successful, Moscow Exchange will become the ninth entity to receive a license.
Russian companies embrace digital financial assets
As foreign funding becomes difficult to obtain in the current geopolitical climate, Russian businesses are increasingly turning to digital assets as a way to raise capital.
Russian regulation has provided such an avenue to shake up financial markets since 2021. According to the 2021 bill, digital financial assets (DFAs) are a class of assets that lie between cryptocurrencies and traditional securities.
Essentially, DFAs are tokenized shares of a company or other corporate enterprise. Various entities have used them to raise capital in recent years. Their popularity is growing.
Last month, for example, state-owned Russian Railways conducted its largest financial instrument offering to date. The national railway operator raised 15 billion rubles by selling DFAs.
But so far, the country's largest stock exchange has not fully adopted the technology.
Last month, the St. Petersburg Stock Exchange became the first exchange operator to be registered as a DFA exchange with the Bank of Russia.
Including the St. Petersburg Exchange, a total of eight companies have registered to issue and list DFAs. These include Sberbank, Alfa-Bank and digital asset platform Atomize.
Moscow Stock Exchange expects DFA listing by the end of 2023
In comments reported by BeInCrypto, Sergey Demidov, director of information security at Moscow Exchange Group, said the company plans to launch DFA by the end of this year.
He added that the company is working with Russia's State Bank to obtain the necessary licenses.
Russia seeks a leaner DFA market
As Russia’s DFA market develops, the country’s policymakers are further encouraging the adoption of new financial instruments.
A law passed by the State Duma could simplify the process, allowing institutions such as the Moscow Stock Exchange to issue and list DFAs on the same platform used for traditional securities trading.
However, the Treasury Department has expressed concerns about plans to further integrate the DFA market into traditional financial infrastructure. In April, an official said the ministry generally supports the technology.
But he warned that allowing DFAs to be listed on stock exchanges could blur the line between digital assets and securities.
