Moscow Exchange Plans Trading by Year-End, Russian Market Embraces Digital Financial Assets

This article briefly:

· Digital Financial Assets (DFA) are becoming an increasingly popular way for Russian companies to raise capital.

• Now, Moscow Exchange hopes to launch its own DFA functionality by the end of this year.

· Some government officials worry that if the DFA is too integrated into the stock exchange, it may 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 licensed entity.

Russian companies embrace digital financial assets

Due to the difficulty in obtaining foreign funding in the current geopolitical environment, Russian businesses are increasingly turning to digital assets as a way to raise capital.

Since 2021, Russian regulation has provided such an avenue to shake up financial markets. According to the 2021 Act, digital financial assets (DFA) are a class of assets between cryptocurrencies and traditional securities.

Essentially, DFAs are tokenized shares of a company or other corporate enterprise. Various entities have used them to raise funds in recent years. Their popularity is constantly growing.

Last month, for example, state-owned Russian Railways conducted its largest issuance of financial instruments to date. The national railway operator raised 15 billion rubles through the sale of DFA.

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 register with the Bank of Russia as a DFA exchange.

Including the St. Petersburg Exchange, a total of eight companies registered to issue and list DFA. These include Sberbank, Alfa-Bank and digital asset platform Atomize.

The Moscow Stock Exchange is expected to list DFA by the end of 2023

Sergey Demidov, director of information security at Moscow Exchange Group, said in comments reported by BeInCrypto that the company plans to launch DFA by the end of this year.

He added that the company was working with the State Bank of Russia to obtain the necessary licenses.

Russia Seeks Leaner DFA Marketplace

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 expressed concerns about plans to further integrate the DFA market into traditional financial infrastructure. In April, an official said the ministry generally supported the technology.

But he warned that allowing DFAs to list on stock exchanges could blur the lines between digital assets and securities.