Two companies have executed the first Russian transaction with digital financial assets as defined by the country’s current legislation. The transaction involved the tokenization and subsequent acquisition of debt issued by a third party.
Russian companies issued and placed digital financial assets
VTB Factoring, a subsidiary of Russia’s majority state-owned Vneshtorgbank (VTB), and fintech firm Lighthouse have announced their first deal for the issuance and placement of digital financial assets (DFA). The latter is a broad legal term in Russian law that encompasses various types of digital assets, including cryptocurrencies, until a dedicated law is adopted.
As part of the transaction, commercial obligations from unidentified issuers are first tokenized on the platform of Lighthouse, a registered “information system operator” authorized to issue and trade DFA, and then VTB Factoring purchased the digital assets, the companies detailed in a press release.
Dealing with debt in the form of a DFA allows parties to reduce the time required to obtain financing and take advantage of relatively low transaction costs, the RBC Crypto news outlet explained in a report. This lowers the overall cost to the issuing entity, as Anton Musatov, CEO of VTB Factoring, elaborated.
Unlike normal factoring procedures, clients are not required to sign a service agreement when transferring commercial receivables. It is enough for the issuer to issue a DFA and obtain the factor’s consent to purchase it.
The news of the successful DFA operation follows the announcement in early June by Lighthouse and Tinkoff Business, the e-commerce arm of Russia’s Neobank Tinkoff, to establish a platform to facilitate digital asset transactions This is the first of its kind in the world. This will allow large and medium-sized companies to raise funds using blockchain technology.
Later, Anatoly Popov, vice chairman of Sberbank’s management board, revealed that the first DFA transactions will take place within a month on the platform developed by Russia’s largest bank. Also known as Sber, this state-owned financial institution represents about one-third of all Russian banking assets and is aregisteredinformation systems operator with the authority to issue digital financial assets.
Russian authorities are seeking to expand the country’s regulatory framework to more comprehensively regulate decentralized digital assets such as Bitcoin, which are only partially covered by the existing law “On Digital Financial Assets,” and developments in the DFA space are As such. A new bill “On Digital Currency” designed to accomplish that should be considered by Russian MPs in September.
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