Register of Digital Financial Asset Exchange Operators

2023: Inclusion of the first organization in the register

The Moscow Exchange became the first organization in the register of digital financial asset exchange operators (CFA), which is maintained by the Central Bank of Russia. The regulator announced this on August 3, 2023. In addition, the National Settlement Depository has included the Moscow Exchange in the register of information system operators issuing CFA.

The emergence of the first CFA exchange operator is an important step for the development of the market for this kind of financial instruments, the Central Bank said in a statement.

The Moscow Exchange became the first organization included in the register of exchange operators of the CFA

By law, CFA exchange operators can be Russian banks, trade organizers, as well as other commercial and non-commercial organizations included in the relevant register. At the same time, the Central Bank, as noted, preliminarily agrees on the rules for the exchange of CFA and confirms the availability of the technical ability to make transactions provided for by these rules.

The Bank of Russia also explained that exchange operators, ensuring the conclusion of transactions with the CFA by collecting and comparing multidirectional applications, can interact with several operators of information systems in which digital rights are issued. This increases the investment attractiveness and liquidity of the financial product, added to the Central Bank.

By the beginning of August 2023, the list of operators for the issue of CFA includes 8 companies: SPB Exchange, Atomyze, Lighthouse, Sberbank, Alfa-Bank, Distributed Register Systems (Masterchain), Tokens and Eurofinance Mosnarbank. Atomyze also previously applied for inclusion in the register of CFA exchange operators.

The Information Systems Operator (IIA) license makes it possible to issue CFAs, and the Exchange Operators License makes it possible to perform operations with CFAs issued not only in the IIA NSD, but also in other systems.

As of August 2023, the Moscow Exchange has several cases in the works. The pilot project of the Moscow Exchange may be short-term CFA for monetary claims. In the future, other scenarios and tools will be presented.

{{quote 'author = said Sergey Kharinov, Director of Digital Assets of the Moscow Exchange. | We are creating an infrastructure to start operations with legal entities and will continue to expand it into new asset classes and client segments. We have serious work to do as a CFA exchange operator. Interoperable communication with various operators of information systems, clearing organization, a single showcase, an understandable client path and services are needed. The digital ruble and the development of monetary settlements can solve the issue of a single client's wallet. All this will ensure and simplify access to individuals and expand the capabilities of legal entities. For the further development of the CFA market, the emergence of unique demanded products and channels for attracting customers is necessary, which will create conditions for the growth of liquidity of the entire CFA market,}}

{{quote 'author = noted Viktor Zhidkov, Chairman of the Board of NSD. | As an information system operator, NSD plans to help issuers and investors develop products based on CFA. For such products, speed of release, flexibility and manufacturability are important. All these factors, together with distributed registry technologies, will ensure a high level of trust in the new emerging market. The inclusion of NSD in the register of information system operators is the first and very important step towards the formation and expansion of the CFA product line. NSD has certain advantages in this: competencies and extensive experience in the securities market,}}

By mid-2023, market players, including the St. Petersburg Exchange, participate in the discussion and preparation of amendments that will allow digital assets to be admitted to organized trading.

We believe that more liquidity for digital financial assets, including hybrid CFAs, can be effectively formed only as a result of their appeal at organized trading, where there are already volumes, a wide range of investment instruments, brokers and their clients, - said the representative of the exchange. Kirill Pronin, Director of the Financial Technologies Department of the Bank of Russia, agrees with this.

In his opinion, the CFA in Russia should get a wider turnover, which can be facilitated by the traditional financial infrastructure, namely exchanges and brokers.^[1]

Notes