A billion rubles worth of digital assets were released in April through platforms approved by the Russian government, according to the local press. The increase in volume has been attributed to Russian businesses testing out new financial instruments since they are having trouble accessing conventional financial support.
The Kommersant stated that seven placements of digital financial assets (DFAs) totaling over 1 billion rubles ($13 million) were done in Russia last month. While this industry is currently relatively modest, according to experts cited by Business Daily, big initiatives may be anticipated by the end of this year.
In Russia, DFAs are a relatively new class of financial instruments, as described by the “On Digital Financial Assets” law, which came into effect in January 2021. These represent “digital rights” to securities or utility tokens and need to have an issuing entity, in contrast to decentralized cryptocurrencies, which are not yet fully regulated.
The mainly state-owned Sberbank, the largest bank in Russia, and Alfa-Bank, the biggest private bank in the nation, sold the majority of the DFAs issued in April.
Along with the business Atomyze, which specializes in the tokenization of commodities, the fintech firm Lighthouse, and the more recently licensed Masterchain, the two are among the operators of DFA platforms that the Bank of Russia has authorized.
Placements reached a total of 2 billion rubles ($26 million) in March, less than a year after the central bank-approved organizations began issuing DFAs. The majority of the analysts Kommersant spoke to are still cautious despite the noticeable gain in the month that followed.
Roman Nekrasov, the co-founder of the Encry Foundation, which promotes Russian IT enterprises, claimed that money may be obtained through already-existing methods like corporate bonds.
Mikhail Uspensky, a member of the expert council of the working group on cryptocurrencies at the State Duma, the lower house of the Russian parliament, claims that a select few big corporations continue to control the DFA market.
He also acknowledged that the financial markets had closed to Russian companies. Uspensky continued, “And many companies are trying to be creative, including by experimenting with DFAs,” noting that the majority of digital asset issuance still serves reputational purposes.
Russian access to the international financial markets was severely constrained by unprecedented Western sanctions implemented in response to Moscow’s invasion of neighboring Ukraine. Russian authorities have been taking steps to increase the usage of digital assets, notably by legalizing crypto payments in cross-border trade and creating a virtual ruble, to lessen the detrimental impacts of the fines.