Legislation on digital financial assets in Russia
Main article: Legislation on digital financial assets and digital currency in Russia (259-FZ)
Register of Digital Financial Asset Exchange Operators
Main Article: Register of Digital Financial Asset Exchange Operators
Chronicle
2024
Ministry of Finance of the Russian Federation announced the issue of CFA for gold
December 12, 2024 Ministry of Finance Russia announced its intention to launch digital financial assets (CFA) and utilitarian digital rights (USP) for gold. This is also done for international purposes.
Deputy Minister of Finance of Russia Alexei Moiseev spoke about the project. It is assumed that the launch of tokenized assets for gold will become an instrument for financing industry.
 | We see that the demand for instruments is growing, so we have plans next [2025], of course, to finance both the UTP and the CFA for gold, including for international settlements. We also believe that this can be a good tool for financing industrialists in this area, "says Moiseev. |  |
In March 2024, Russian President Vladimir Putin signed a law allowing the use of the CFA, UTP, as well as hybrid digital rights, which simultaneously include both of these tools, in international calculations. The Bank of Russia is empowered to establish the conditions for certain foreign exchange transactions with digital assets and to prohibit them. In addition, the Central Bank received the right to request information from the person who issued the CFA, or from the operator on their release about the beneficial owners of the persons who issued such assets.
Earlier, Russian Finance Minister Anton Siluanov said that the CFA could replace ordinary payment instruments. According to him, operations in digital financial assets and stablecoins in the future will become an alternative to traditional methods of international settlements due to cheapness, speed and reliability. CFAs provide a number of advantages: they are released and counted only in digital format, and blockchain guarantees the security of data and the impossibility of replacing it. The information required to make transactions with the CFA is posted on the operator's website.[1]
The volume of CFA output in Russia for the year increased 5 times and exceeded ₽273 billion
The volume of output of digital financial assets in Russia has increased fivefold since the beginning of the year and exceeded ₽273 billion. This became known on December 12, 2024. According to forecasts of information system operators, short-term unsecured cash requirements will remain a priority product in the medium term.
According to TASS, First Deputy Chairman of the Bank of Russia Vladimir Chistyukhin at the parliamentary hearings in the State Duma emphasized the significant potential of digital financial assets in cross-border settlements. To develop this direction, an appropriate law has already been adopted.
The most promising are digital financial assets with structural income, payments on which depend on external indicators - indices, stock quotes, commodity prices, real estate values. However, their share has not yet exceeded 2.5% of the total volume of issues since 2023.
Experts note the successful passage of the test period by the CFA market. The achievement of the planned volumes will depend on the general market conditions and the readiness of the participants to form their own institutions and regulatory systems, based on the experience of traditional financial instruments.
To further develop the market, standardization of practices in the field of information disclosure, risk assessment, structuring of transactions and ensuring liquidity is required. This will preserve the unique properties of the CFA as a funding tool and minimize the risks of unfair arbitration.
The development of the digital financial asset market is one of the priority areas for the digitalization of the financial sector of Russia. The Bank of Russia actively supports the introduction of new financial instruments, providing the necessary regulatory framework for their safe use.[2]
The Central Bank of the Russian Federation has developed regulation of information system operators with the right to issue CFAs
In September 2024, the Central Bank of Russia presented the concept of regulating the activities of information system operators (OIS) with the right to issue digital financial assets (CFA). The new approach is intended to amend the rules for working with the CFA, expanding the circle of investors and revising investment limits.
According to Kommersant, the document amends the 5635-y provision, which regulates the access of unqualified investors to the assets of the CFA market. Kristina Aleshina, Deputy Director of the Financial Market Infrastructure Department of the Central Bank, said that the new provision will be reissued in 2025. The full range of issued CFAs is available only to qualified investors, including instruments issued under foreign law, as well as with payments dependent on future events. Unqualified investors can acquire CFA, but with a limit of ₽600 thousand per year.
By September 2024, the Central Bank is also developing additional measures to improve the consistency of the procedure for stopping the activities of information system operators. The regulator, together with market participants, plans to ensure the protection of all participants - both CFA issuers and their owners - as well as the safety of records in the information system, even in the event of the termination of OIS activities. The Bank of Russia is considering various regulatory options to ensure the necessary level of confidence in this market segment.
According to the Central Bank, as of mid-2024, the number of qualified investors amounted to about 800 thousand people, which is less than 2% of the total number of private investors. The number of investors investing in the CFA reached 196 thousand people. However, it is not specified how many of them are qualified.[3]
Khlynov Bank has placed digital financial assets
The placement of digital financial assets (CFA) of Khlynov Bank at the Atomais site has been completed. Atomyze (Tokentrust AG) announced this on September 12, 2024. Read more here.
Bank of Russia spoke about the first financial pyramid in the CFA market
In September 2024, the Bank of Russia announced an attempt to place the first asset with signs of a financial pyramid in the digital financial asset market (CFA). Deputy Chairman of the Bank of Russia Philip Gabunia said that due to a coincidence, this asset did not go into circulation, which prevented possible negative consequences. This happened on one of the leading platforms specializing in the placement of digital assets.
According to Interfax, this case was the first precedent in the CFA market, which drew attention to the need to strengthen control over the placement of assets on such platforms. Gabunia stressed that the Bank of Russia intends to work on the creation of a system that will allow platforms to carefully evaluate assets before their release in order to avoid the appearance of such fraudulent schemes. According to him, so far no clear parameters have been established for such control, but the regulator is considering the possibility of developing appropriate measures.
Philippe Gabunia noted that one organization tried to sell a digital asset, which at its core represented a regular financial pyramid. However, thanks to vigilance and a "wonderful coincidence," this asset was not released into circulation. He also added that the organization did not have time to raise funds, which prevented damage to potential investors.
By September 2024, the Bank of Russia is working to prevent possible risks associated with the emergence of fraudulent schemes in the digital asset market. Gabunia noted that such cases can seriously harm the reputation of platforms and undermine confidence in a new and promising segment of the financial market. In this regard, the Central Bank plans to appeal to the platforms with a request to pay more attention to the process of asset valuation before their release.[4]
What hinders the development of digital financial instruments in Russia
In case of successful implementation of legislative initiatives and elimination of the problem of platform isolation from each other, the volume of the digital financial assets (CFA) market in Russia by the end of 2026 may reach 500 billion rubles. This is stated in the materials of the National Rating Agency (NRA), published on July 12, 2024.
It is noted that by mid-May 2024, 313 issues of CFA from 77 issuers are in circulation in the Russian Federation. Moreover, 88 of them, or 28% of the total, were placed in the first quarter of this year. The authors of the report highlight several key risks of the Russian CFA market. This is, in particular, credit risks: despite the digital nature of the asset, there is a possibility that the investor may not receive the main debt and interest. In addition, the risks of infrastructure operators are called: information system operators (OIS) have a direct impact on the process of issuing and circulation of CFA, therefore, it is advisable to assess this counterparty for compliance with the requirements.
There are also operational risks, such as the failure of the OIC to ensure continuous and uninterrupted operation of the platforms. The risks of the transaction structure are also indicated: often the release may be non-standard, which entails legal risks due to the lack of established practice of a specific type of CFA.
The development of the Russian industry of the CFA, according to the authors of the report, will be facilitated by the solution of a number of issues. This is the attraction of new players (large issuers, potential OICs, long-term investors); developing a convenient financing structure for small and medium-sized organizations with high scalability potential; development of practices for obtaining credit ratings of issuers and issues of CFA. It is also said about the need to create a "single window" to overcome the problem of platform isolation: the authors of the study believe that the main deterrent in the Russian Federation is the lack of a secondary market for the circulation of such securities, which is caused by the isolation of platforms from each other.[5]
CBR: Foreign trade participants are already using digital financial assets in international settlements
The Central Bank of Russia reported that participants in foreign economic activity (VED) are already actively using digital financial assets (CFA) for international settlements. This information was announced on July 4, 2024 by the First Deputy Chairman of the Central Bank of the Russian Federation Vladimir Chistyukhin.
According to Interfax, among the users of the CFA for international transactions, there are not only professional participants in the financial market, but also corporate clients. To carry out such operations, Russian platforms for the release of CFA and their rules must be registered with foreign partners.
Vladimir Chistyukhin stressed that the regulator is in favor of using all possible channels and mechanisms in international settlements. In this regard, it is expected to adopt amendments to the legislation that will allow the use of various types of cryptocurrencies to make cross-border payments. This can be implemented either within the experimental regime or on an ongoing basis.
It is expected that from September 1, 2024, the Central Bank will be able to start creating an experimental platform for the use of cryptocurrencies in international settlements. The corresponding bill was submitted to parliament at the end of April 2024.
In March 2024, Russian President Vladimir Putin signed a law allowing the use of CFA in international settlements. According to the document, digital financial assets can be used as a counter representation under foreign trade agreements between residents and non-residents.
However, on March 26, 2024, the United States imposed blocking sanctions against several Russian operators of CFA platforms, including Atomais, Lighthouse and Masterchain. Despite this, another 8 participants remain in the Central Bank register, including the sites of the largest banks, most of which are also under blocking sanctions.[6]
Wildberries placed the CFA on the Sberbank platform
On Sberbank Digital Asset Platform the international platform e-commerce logistics Wildberries in the field and published a decision on the release of digital financial assets (CFA) in the amount of 1 billion. rubles The price of 1 CFA upon release is 1000 rubles. The issue provides for a monthly payment of interest income, which will be equal to the size of the key rate + Bank of Russia 1.15% per annum. Sberbank announced this on May 23, 2024. Read more here [1]
Placement of the release of Wildberries digital financial assets took place
On May 17, 2024, the placement of the issue of digital financial assets (CFA) of the company took place. Wildberries Read more here.
Rostelecom issued digital financial assets worth 1 billion rubles
On May 14, 2024, Rostelecom announced the release of digital financial assets (CFA) in the amount of 1 billion rubles. The Sberbank site was chosen as their location. Read more here.
At the AFT site, the release of CFA by SMEs on the security of real estate with the participation of the collateral manager is piloted
At the site of the FinTech Association (AFL), a pilot was launched to use digital financial assets (CFA) to attract financing by small and medium-sized businesses (SMEs): an individual entrepreneur released a CFA on the Tokeon platform, the first owner of which was Center Invest Bank. Within the framework of the pilot, the AFL proposed a model that includes collateral management in the process, this will speed up the circulation of the CFA and increase the liquidity of the CFA market. The AFL announced this on April 12, 2024. Read more here.
Special depository "Infinitum" became the first nominal holder of the CFA in Russia
On March 18, 2024, the specialized depository Infinitum became the first nominal holder of digital financial assets (CFA) in Russia. The transaction was carried out on the CFA Hub platform as part of the MTS ecosystem. Read more here.
Norilsk Nickel subsidiary issues Russia's first digital financial assets for gold, palladium, platinum, copper and nickel
On March 14, 2024, Gypief Investments, a subsidiary of "" Norilsk Nickel for the digitalization of metals, announced the release of the first Russia digital financial assets (CFA) in gold, palladium, platinum, copper and nickel. The placement took place on the blockchain platform Atomaiz"." More. here
Russia allowed to use digital financial assets in international settlements
On February 27, 2024, the State Duma of the Russian Federation adopted a law allowing the use of digital financial assets (CFA) in international settlements. It is assumed that this will help Russian importers and exporters to work more actively with friendly countries.
In accordance with the new rules, the CFA can be used as a counter representation under foreign trade agreements concluded between residents and non-residents. Similar changes apply to utilitarian digital rights. At the same time, changes in the execution of international transactions do not apply to cryptocurrency, which, according to Russian law, is not a digital financial asset.
Operations for the transfer of utilitarian digital rights, CFAs or hybrid CFAs are subject to mandatory control if they are carried out within the framework of foreign trade contracts between residents and non-residents. The Bank of Russia is empowered to establish the conditions for certain foreign exchange transactions with the CFA and to establish a ban on such actions. At the same time, the Central Bank has the right to request from the person who issued the CFA, or from the operator for the release of the CFA, information about the beneficial owners of the persons who issued these assets.
The definition of digital rights that are and are not currency values is also being specified. The document allows currency transactions related to the acquisition and alienation of digital rights, which are currency values, subject to settlements in the currency of the Russian Federation, as well as transactions related to the fulfillment of their obligations by a person obliged to digital rights, which are currency values, subject to the fulfillment of such obligations in the currency of the Russian Federation. Experts say that the adopted changes will help partially solve the problem of sanctions pressure on Russia.[7]
How the market for digital financial assets is developing in Russia
As of the end of 2023, the total number of issues of digital financial assets (CFA) is about 350, and the market volume in monetary terms is estimated at 60 billion rubles. Such figures are given in a study by the rating agency ACRA, the results of which are presented on February 20, 2024.
The report says that in 2023, both financial institutions and non-financial companies acted as issuers of the CFA, among which were representatives of small and medium-sized businesses. By the end of 2023, the register of the Central Bank of the Russian Federation contains 10 platforms for issuing CFAs: these are three banks (Sberbank, Alfa-Bank, Eurofinance Mosnarbank), NSD, SPB Exchange, Atomais, Lighthouse, Distributed Register Systems (Masterchain), Tokens (Tokeon) and Blockchain Hub (part of the MTS ecosystem). At the same time, there is only one operator for the exchange and creation of the secondary market of the CFA - the Moscow Exchange.
The report says that at the end of 2023, a significant share of the CFA fell on short-term issues. According to estimates, a quarter (25%) of the total volume of issues provided financial instruments with a circulation period of up to three months. Thus, analysts believe that CFA issuers are either still in search of their most rational application, or are testing the processes of issuing and servicing this class of financial assets and studying the investor base. Mainly, fixed rates are established for the CFA with the payment of a coupon during the term of circulation of a financial instrument or when repaying a debt.
In general, as noted, in Russia, the formation of the infrastructure of the CFA market is at the final stage. The most widespread are simple forms of CFA that certify monetary requirements for the issuer. ACRA experts predict that the market volume may reach 250 billion rubles by the end of 2025. More significant growth will be hindered by a limited investor base, as well as established limits on the annual volume of investments for individuals. In 2026, the size of the industry may increase to 500 billion rubles.[8]
Rostelecom included CFA in liquidity management using the A-Token platform
Rostelecom and Alfa-Bank continue to actively develop inter-corporate financing using digital financial assets (CFA). In February 2024, Rostelecom, together with Alfa-Bank, organized the third issue of digital financial assets for corporate and private investors and plans to use this tool on an ongoing basis. Read more here.
"Team Force" implemented a tool based on blockchain technology
On December 27, 2023, the company TEAM FORCE"," a member of the investment association in the IT sphere TEAM FORCE Alliance"," announced the release of Masterchain Platform a technology-based instrument blockchain in order to attract financings small and medium-sized IT companies - a digital financial asset. Read more here.
Sber provided the opportunity to register on the platform of digital assets to all individuals
Sberbank on February 2, 2024 provided the opportunity to register on the platform of digital assets to all individuals. Read more here.
2023
4 out of 5 digital financial asset operators in Russia turned out to be unprofitable
On July 2, 2024, it became known that four out of five digital financial asset operators (CFAs) in Russia completed 2023 with losses. This information is based on an analysis of the financial statements of companies whose main activity is the issue and conduct of transactions with CFA.
According to Vedomosti, Atomais, Distributed Register Systems (Masterchain), Token (Tokeon) and Blockchain Hub (ZFA Hub) were among the unprofitable operators. The only company to show profit was Lighthouse.
The largest net loss in 2023 was recorded at Atomais - 428.9 million rubles. The company explained this by the significant costs of issuing CFA, as well as operational and other costs, which in total amounted to 640 million rubles. At the same time, the total income of the site from sales and received interest reached 110.4 million rubles.
Tokens included in the group PSB received a net loss of 61.8 million rubles with a total income of just over 14 million rubles. Blockchain Hub completed 2023 with a net loss of 91.3 million rubles, and Distributed Register Systems - 36.7 million rubles.
The only profitable operator was Lighthouse, which showed a net profit of 214.7 million rubles. The company's total revenues amounted to 314.6 million rubles, and expenses - 90.6 million rubles.
The unprofitability of most CFA operators is associated with the initial stage of market formation and the need for large investments in infrastructure. Alexandra Verolainen, Managing Director for Structured Financing Ratings at Expert RA, emphasizes that this is a natural phenomenon for new business.
Timur Iskandarov, Senior Director of ACRA, points to the commission business model of CFA sites, where income directly depends on the number and volume of digital assets issued. He believes that the main factor in losses was insufficient turnover, which is typical for the emerging market.[9]
CFA operators in Russia attracted 180 billion rubles for the year
At the end of 2023, the volume of investments attracted in Russia through platform service operators exceeded 180 billion rubles. This is stated in the report of the Bank of Russia, published on March 19, 2024.
The shown result, as noted, indicates that a new niche is being formed in the financial market of the Russian Federation. It was occupied by financial and investment platforms that are engaged in crowdfunding, as well as information systems for the release of digital financial assets (CFA). They contribute to the emergence of alternative sources of investment, increasing the availability of financial services for citizens and introducing innovations.
As of the end of 2023, the Central Bank's register included 78 investment platform operators, nine financial platform operators, ten information system operators in which the CFA is issued, as well as one CFA exchange operator.
In 2023, the most funds were raised through financial platforms, the so-called marketplaces (Finservugi, Банки.ру, Сравни.ру, etc.): the figure amounted to 81.5 billion rubles. At the same time, the main part fell on the purchase of banking products - almost 94%, or 76.5 billion rubles. Transactions with securities provided 5 billion rubles. By the end of 2023, there were 252 existing issues of digital assets and other rights on ten platforms for the release of the CFA with a total value of slightly less than 56.4 billion rubles.
It is also noted that investment platforms work in the field of crowdfunding, that is, collective attraction of financing. In 2023, companies and citizens attracted 22.8 billion rubles through crowdlanding (provision of loans), and through crowdinvestment (acquisition of securities) - almost 5 billion rubles. At the end of 2023, 123,287 investors were registered on investment platforms, of which 69,202 were active.[10]
Rosbank issued an index CFA on the Atomais platform
A special type of CFA has been released on the Atomais platform - their cost is tied to the Moscow Exchange index for 2024. Rosbank announced this on December 27, 2023. Read more here.
Russian government agencies will begin to produce CFA
On December 21, 2023, it became known that Russian information system operators are preparing to place issues of digital financial assets (CFA), the issuers of which will be executive authorities. It is assumed that for government agencies, the CFA will become an additional tool for attracting funds from corporations and individuals.
According to the Vedomosti newspaper, several participants in the Russian market spoke about the initiative. In particular, the Tokeon platform is discussing with government authorities the possibility of issuing a CFA instead of classic bonds. The project is also working on the Lighthouse financial ecosystem. Government and municipal loan bonds are traditionally considered the most reliable investment instruments due to their stability. CFAs from executive authorities can become equally reliable, since the same issuers will fulfill the obligations on issues.
It is noted that all state structures have their own subordinate organizations implementing certain projects with a private-state partnership. At the same time, says Denis Iordanidi, general director of the Lighthouse ecosystem, the subjects use borrowed funds. In this case, CFA, along with classical securities, will become an effective borrowing tool. Moreover, CFAs will provide additional flexibility, since a variety of conditions can be laid in them.
Various government agencies are expected to be able to use the CFA to their advantage. Among them are named ministries, specialized agencies and committees, services, administrations, city halls and other government structures. From a legal point of view, issuing a CFA from a government agency for information system operators is no different from issuing a commercial structure.[11]
MTS released digital financial assets on its own platform "CFA Hub"
On December 14, 2023, MTS announced that it had carried out another issue of digital financial assets (CFA) worth 240 million rubles - the debut for the CFA Hub blockchain platform, the developer and creator of which is a subsidiary of MTS - Blockchain Hub LLC. Read more here.
Alfa-Bank began to use its CFA platform to work with non-residents
On December 12, 2023, it became known that Alfa-Bank had prepared its own platform for the release of digital financial assets (CFA) for working with non-residents. The project was implemented within the framework of the law, which will allow the use of digital rights in settlements in foreign trade. Read more here.
Individuals will be able to perform operations on the platform of digital assets "Sberbank"
Sberbank has expanded the functionality of its digital asset platform for individuals who are clients of the bank. Now they have access to the possibility of crediting and withdrawing funds for settlements on transactions with digital financial assets (CFA). So far, this functionality is being tested on a limited group of users. This was announced on December 6, 2023 by Anatoly Popov, Deputy Chairman of the Management Board of Sberbank. Read more here.
The first sale and purchase transaction of the CFA was concluded on the Moscow Exchange
On December 6, 2023, on the platform of the operator of the exchange of digital financial assets (CFA) of the Moscow Exchange, the first sale and purchase transaction was concluded with the CFA as part of secondary circulation. Representatives of the Moscow Exchange told TAdviser about this.
The deal was concluded with the issue of the CFA, placed by PJSC Rostelecom on December 4, 2023 in the amount of 200 million rubles. Read more here.
The largest data center operator in Eurasia BitRiver has released a CFA on the Russian blockchain platform
The largest operator of data centers in Eurasia, BitRiver, has released digital financial ones on the Russian blockchain platform Masterchain. The company announced this on November 30, 2023. Read more here.
Sberbank issued the first loan in Russia secured by the CFA
Sberbank conducted a test lending transaction, the collateral of which was digital financial assets (CFA). This is another step towards finding new niches for the application of the CFA instrument in financial markets. The purpose of the transaction is to study client experience, legal form and implementation mechanisms. Sberbank announced this on November 21, 2023. Read more here.
Since the beginning of the year, the volume of placement of digital financial assets in Russia has reached 42 billion rubles
From January to mid-October 2023, the volume of placement of digital financial assets in Russia exceeded 42 billion rubles in almost 140 issues. With this, some of them are at the placement stage by October 20, 2023, and three issues (by 0.8 billion rubles) were declared invalid. Kommersant cites such data on October 20, 2023.
According to the Expert RA rating agency, at the end of September 2023 in Russia, companies made 133 CFA issues through platforms for 32 billion rubles - by the end of 2023 the market will grow to 35 billion rubles, and the number of issues - up to 150, operators expect. A year ago, issuers issued 19 domestic CFAs worth 700 million rubles.
As of the end of September 2023, the Central Bank's register includes 10 platforms - NSD, SPB Exchange, three banks (Sberbank, Alfa Bank, Eurofinance Mosnarbank), Atomais, Lighthouse, Distributed Register Systems (Masterchain), Tokens and Blockchain Hub (part of the MTS ecosystem ). So far, there is only one CFA exchange operator in the Central Bank register - the Moscow Exchange.
For the nine months of 2023, according to Expert RA, 90% of issued CFAs are represented by simple monetary requirements. According to the expectations of information system operators (OIS, have the right to issue CFAs), this focus will continue into 2024. Market participants consider short-term loans, b2b financing and factoring to be the most promising. However, to develop it, it is necessary to equalize tax conditions with the securities market, as well as simplify customer identification.
For the development of the market, according to the general director of Atomais Ekaterina Frolovicheva, first of all, it is necessary to equalize tax conditions with the securities market so that CFAs are taken into account in the general tax base. According to the general director of Sagrada Legal Oleg Ushakov, one of the most important issues is the simplification of the identification procedure.[12]
The government and the Central Bank of the Russian Federation have developed a step-by-step plan for cross-border settlements in digital financial assets
The Russian government and the Central Bank of Russia have developed a step-by-step plan for cross-border settlements in digital financial assets. The head of the Cabinet of Ministers Mikhail Mishustin told about this at the end of September 2023.
| | Now we are working on the launch of cross-border settlements based on blockchain technology using digital financial assets and related utilitarian digital rights. The government, in coordination with the Bank of Russia, has prepared such a step-by-step plan to create such a system, within the framework of which legal and technical aspects will be analyzed, he said. | |
According to him, this measure, as well as a number of other financial initiatives, will give new opportunities to attract foreign investment, which in the current conditions can significantly facilitate the movement of capital. Mikhail Mishustin stressed that improving the "transport and payment components" of foreign economic interaction with partners from "friendly" countries is a priority task for the government. The wider use of the Russian currency in settlements is also a priority.
Earlier, the Chairman of the Government of the Russian Federation said that the introduction of digital assets is necessary as a safe alternative, guaranteeing uninterrupted payment for imports and exports. He drew special attention to the importance of working to ensure the technological independence of infrastructure and cybersecurity of financial organizations.
| | We need to intensively develop innovative areas, including the introduction of digital assets. This is a safe alternative for all parties, which is able to guarantee uninterrupted payment for the supply of goods from abroad and for export, - said the head of the Cabinet.[13] | |
Mosbirzha held the first issues of the CFA
The Moscow Exchange held the first issues of the CFA. Gazprom Neft and GPB-Factoring became issuers of assets. This was announced on September 27 by the press service of the Moscow Exchange. Read more here.
Sber issued the first loan in Russia through the CFA with a pledge in the form of a real asset
Sberbank on August 22, 2023 announced a lending transaction through digital financial assets (CFA) under a real property pledge. This is an analogue of a loan in which CFAs are a debt obligation secured by a pledge in the form of movable property of the company and goods in circulation, and the decision to issue contains information about the subject of the pledge. Read more here.
In Russia, the first CFAs were issued, tied to real financial assets - to the shares of Lukoil
On August 11, 2023, it became known about the release of the first in, Russia digital financial assets (CFA) tied to real financial assets - to the value of shares "" and the Lukoil key rate. This tool decided to release Alfa-Bank. The volume of the first issue will be 300 million, the rubles circulation period is one month. More. here
The Moscow Exchange was the first on the Russian market to receive a license from the exchange operator CFA
On August 3, 2023, the Bank of Russia included the Moscow Exchange in the register of digital financial asset exchange operators (CFAs) ensuring the conclusion of transactions with the CFA, and the National Settlement Depository in the register of information system operators issuing CFAs. Thus, the Moscow Exchange became the first CFA exchange operator in Russia. Read more here.
What the Russian digital asset market looks like
As of the end of July 2023, five information systems (IS) operators in Russia have carried out more than 80 issues of digital financial assets (CFA) totaling approximately 20 billion rubles. This is stated in the analytical material of the newspaper "Kommersant," published on July 28, 2023.
CFAs first appeared on the Russian market in July 2022: then three IS operators - Lighthouse, Sberbank, Atomais - carried out pilot issues worth 60 million rubles. By mid-2023, six more operators began to work in the country: Alfa-Bank, Masterchain, Tokeon, Eurofinance Mosnarbank, St. Petersburg Exchange, Blockchain Hub. The Bank of Russia also considers applications from a number of organizations for inclusion in the register of IP operators and for obtaining the status of CFA exchange operators.
Financial structures - credit institutions, leasing and factoring companies - are showing the greatest interest in the CFA market. Moreover, they act in different status - as operators, issuers and investors. Developers are also eyeing the CFA segment. In some cases, the value of such assets is tied to the value of real estate, and several sites tested the circulation of "golden" CFAs - precious metals tied to the price. An additional incentive for the development of the "gold" CFA market, as noted, may be the exemption from VAT operations with them within the framework of the amendments to the Tax Code adopted at the end of July 2023.
The largest deal with the CFA on the Russian market was carried out by Russian Railways and VTB Factoring: the volume of placement amounted to 15 billion rubles. At the same time, placements worth hundreds of millions of rubles have become common. More than half of the issues have a term of more than three months.
However, the development of the CFA market in the Russian Federation is constrained by a number of factors: weak investor interest, regulatory and tax restrictions. Some of the problems will be solved with the entry into the stock exchange market as CFA exchange operators. This is expected to "increase customer awareness of the tool and fill the market with liquidity."[14]
Putin exempted from VAT operations to sell CFA individuals for precious metals
Russian President Vladimir Putin signed a law that exempts from VAT operations to sell individuals digital financial assets (CFA), the basic asset of which is precious metals. The corresponding document was published on the official portal of legal information on July 31, 2023.
Since 2022, operations to sell precious metal ingots to individuals by banks are exempt from VAT. The law adopted in July 2023 extends a similar benefit to operations for the sale of CFA citizens, whose base asset is precious metals.
At the same time, a zero VAT rate is established when such a CFA is sold by its manufacturer, provided that such an asset grants the right to receive an ingot when it is repaid. When selling precious metals in ingots to individuals, zero VAT will also be applied when paying off the CFA.
In addition, the law introduces the possibility of providing a tax deduction for VAT when applying to the CFA. And the functions of the tax agent for personal income tax when determining the tax base with CFA operations are assigned to the operator of the digital platform or broker.
The law also restores the rule on exemption from VAT operations for the sale of unprocessed natural diamonds from the State Fund of the Russian Federation and regional funds to processing enterprises. This norm was previously in the NK, but "accidentally fell out" some time ago when amending the code, explained the deputy head of the Ministry of Finance of the Russian Federation Alexei Sazanov.
In June 2023, the Ministry of Finance called for the use of citizens' cryptocurrency to develop the digital financial asset market. Crypto assets stored by Russians can be used to buy digital financial assets and then implemented in international settlements, says Ivan Chebeskov, head of the Finance Ministry's financial policy department.
Interros-related venture capital fund raises funds through CFA
On July 12, 2023, it became known that the management company of the Voskhod venture fund, whose anchor investor is Vladimir Potanin's Interros, is working to launch new mechanisms for attracting investments. One of them is the receipt of funds from private investors through digital financial assets (CFA). Read more here.
Russia adopted a law allowing CFA operators to conduct remote identification of foreign customers
At the end of June 2023, the State Duma adopted a bill allowing Russian banks to entrust foreign banks or financial market organizations with remote identification of foreign customers. In particular, such powers can be vested in operators for the release of digital financial assets (CFA).
| | Credit organizations have the right to entrust, on the basis of an agreement, a foreign bank or other foreign organization of the financial market (hereinafter referred to as a foreign financial organization) to identify a client, client representative, beneficiary, beneficial owner, as well as update information about clients, client representatives, beneficiaries, beneficial owners, - the bill says. | |
It is clarified that the Central Bank has the right to make a decision to prohibit a credit institution from entrusting a foreign financial institution with identification.
| | In turn, foreign legal entities are equalized in their rights with Russian legal entities in terms of the possibility of opening an account without the personal presence of a representative, if the previously indicated representative was identified with a personal presence in a credit institution opening an account and is serviced by this credit institution, the explanatory note to the document says. | |
According to the authors of the initiative, the amendments introduced will facilitate foreign individuals and legal entities access to Russian banking products.
As part of the first reading, it was assumed that only Russian credit organizations would receive permission to remotely identify foreign clients. By the second reading, the list of organizations was expanded, professional participants in the securities market (with the exception of investment advisers), operators of the investment platform, management companies of investment funds, mutual funds and non-state pension funds, as well as operators for issuing CFAs will be able to remotely identify non-residents in the Russian Federation.[15]
Russian Railways held the largest issue of CFA in Russia - by 15 billion rubles
On June 16, 2023, the largest transaction with digital financial assets (CFA) in Russia was announced. Russian Railways acted as the issuer. The volume of output amounted to 15 billion rubles. The period of circulation of the CFA is 180 days. The rate is 8.45% per annum. The platform for the issue and redemption of the asset was the Masterchain platform. Read more here.
The volume of the Russian market for digital financial assets is estimated at 4.6 billion rubles
As of mid-June 2023, the total volume of digital financial assets issued in Russia (CFA) amounted to about 4.6 billion rubles. This was announced by the general director of Atomais (part of the Interros group) Ekaterina Frolovicheva. In fact, this market has existed since the summer of 2022, so we are talking about the annual output of CFA.
| | Modestly, honestly, expectations were higher. At the same time, one quarter of the issue, one billion is the landmark breakthrough that took place in February of this [2023] year, "she said (quoted by TASS). | |
According to Frolovicheva, Atomais accounted for more than 45% of CFA issues. The largest issue of the CFA for 1 billion rubles was organized in February 2023 at the Atomais infrastructure with the participation of the ICD.
The volume of the digital financial assets market by the end of 2023 will grow to 100 billion rubles, and in 2024 it will exceed 1 trillion rubles, said Sergey Ryabov, director of business development at Masterchain (SRR LLC, part of the register of CFA operators). He said that by the end of 2022, the issue reached 1 billion rubles, in January-June 2023 it grew by another 3.5 billion rubles, the number of issues is approaching 50.
Managing Director, Director of the Sberbank Blockchain Laboratory Alexander Nam said that in the future, with an increase in the number of market participants on it, there may be a need for standardization. Customers, he said, will begin to use different sites, in connection with which the issue of technological compatibility and interoperability of systems will arise. In addition, the expert considers the emergence of additional services possible.
We are sure that the CFA market will actively develop. To the State Duma
| | Yesterday there were 2.5 billion rubles. In fact, geometric progression is already beginning and, obviously, experience, understanding, adjustment of the entire system is being developed, so I am optimistic about the market, "said Anatoly Aksakov, head of the State Duma Committee on the Financial Market, in mid-June 2023. - I think that this [2023] year it will come out for tens of billions, and then for hundreds, and trillions. I am sure that in a couple of years it will be a trillion market, since investors will get used to this tool, and the legislative and rule-making adjustment will happen.[16] | |
Expobank placed digital bonds with a yield of 8% per annum
Expobank placed its first digital financial assets (CFA) on monetary claims on the Atomais platform. The press service of the credit institution announced this in June 2023. Read more here.
Financial marketplaces in Russia will be able to produce CFAs and become a platform for their circulation
On June 13, 2023, the State Duma adopted a bill according to which financial marketplaces will be able to combine their work with the activities of a blockchain platform that produces or exchanges digital financial assets (CFA). Read more here.
The first digital financial assets secured by residential real estate were issued in Russia
The first digital financial assets (CFA) secured by residential real estate were issued in Russia. This became known on May 16, 2023. Read more here.
The Russian market for digital financial assets has revived sharply
In Russia, the market for digital financial assets (CFA) suddenly revived: at the end of April 2023, their output amounted to approximately 1 billion rubles. Such an assessment was released in early May 2023.
According to the Kommersant newspaper, during April 2023, seven issues of the CFA were announced. A significant part of them was implemented by Sberbank: on April 17, a decision was published on the release of the CFA Radio City LLC (up to 2 million rubles), on April 25 - the Leasing Union (up to 10 million rubles), on April 26 - the Holding of Culture and Technology (up to 100 thousand rubles), the GAZ Automobile Plant (up to 100 thousand rubles) and Radio City (up to 1.4 million rubles).
In addition, in April 2023, Alfa-Bank"" conducted Rostelecom the placement of monetary obligations "" in the amount of 750 million rubles. CFAs were issued as a monetary claim for a period of 90 days - with a fixed interest income of 9% per annum. Kommersant clarifies that the issue was carried out on the A-Token Alfa-Bank platform, and the investors included large commercial, banks legal entities and individuals.
Atomais announced a program to sell CFAs secured by shares in the Norilsk Nickel mining and metallurgical company. The limit of funds attracted by the issuer is 150 million rubles, and holders will receive dividends on shares. The maturity date is May 11, 2028.
Some experts, in particular, the head of the Directorate for the Development and Sale of Digital Financial Instruments of SPVB Vyacheslav Blagirev, believe that the issues carried out are inherently close to market transactions. We are talking about a market mechanism for setting prices and conditions, as well as attracting investors. However, most experts, as Kommersant emphasizes, are still skeptical about the CFA, saying that this segment in the Russian Federation remains the lot of selected large players.[17]
2022:20 CFAs worth 1.8 billion rubles were produced on the Atomais platform for the year
Since the first launch on the Atomais platform (summer 2022), 20 issues of digital financial assets (CFA) of 9 issuers with a total volume of 1.8 billion rubles have taken place. Of these, 10 issues have already been redeemed, 10 are existing issues. During this time, 40,000 investors became participants in the platform. This was reported in the Telegram channel of the project on June 14, 2023. Read more here.
Notes
- ↑ The Ministry of Finance wants to launch the CFA for gold in 2025
- ↑ The volume of CFA output increased fivefold in 2024
- ↑ CFA will expand the circle of investors
- ↑ The Central Bank of the Russian Federation reported an attempt to place a financial pyramid on the CFA market
- ↑ Overview of the Russian CFA market: how credit ratings will attract new players
- ↑ The Central Bank of the Russian Federation said that foreign trade participants are already calculating in digital financial assets
- ↑ On Amendments to Certain Legislative Acts of the Russian Federation
- ↑ Digital financial assets - what's next
- ↑ Most classic CFA operators were unprofitable last year
- ↑ The volume of investments attracted through platform service operators exceeded 180 billion rubles by the end of 2023
- ↑ Lighthaus and Tokeon began to prepare for possible issues of the CFA from government agencies
- ↑ Money multiplies the figure
- ↑ The Cabinet of Ministers and the Central Bank have prepared a plan to create a system of cross-border settlements in the CFA
- ↑ Exchange, circle exchange
- ↑ CFA operators will be able to remotely identify foreign customers - bill
- ↑ The volume of CFA issues in Russia reached 4.6 billion rubles
- ↑ Digital assets multiplied in spring
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