Russia points finger at U.S. for Kremlin drone attackRussia’s digital financial assets (DFA) market has recently experienced a resurgence, with seven issues announced in April totaling approximately 1 billion rubles.
While skeptics argue that only major players have access to DFAs and that the placements are more of a fashion statement than a legitimate financial instrument, optimists believe that significant DFA projects are on the horizon by the end of the year.
Sberbank leads the way in DFA issuance
In April, the majority of the DFA issues were carried out by Sberbank, Russia’s largest bank. They included placements for Radio City LLC, Soyuz Leasing, Holding Culture and Technology, and GAZ Automobile Plant.
Other issuers included Alfa-Bank, which placed financial obligations for Rostelecom, and Atomize, which announced a program to sell DFAs backed by shares in MMC Norilsk Nickel.
Vyacheslav Blagirev, head of the Directorate for the Development and Sales of digital financial instruments at SPCE, notes that recent issues are close to market transactions, meaning that they involve market mechanisms for setting prices and attracting investors.
As the volume of such transactions increases, Blagirev believes that the emerging issues of methodology and mediation will be resolved, paving the way for the development of the DFA market.
Challenges in the Russian DFA market
However, many experts remain skeptical about the potential of DFAs in Russia. Roman Nekrasov, co-founder of the ENCRY Foundation, points out that existing tools, such as corporate bonds, can achieve the same fundraising objectives.
Moreover, Mikhail Uspensky, a member of the expert council of the working State Duma Cryptocurrency Group, highlights that the DFA segment in Russia remains the domain of large players, with smaller businesses facing bureaucratic obstacles when attempting to raise funds through DFA placements.
Dmitry Machikhin, CEO and founder of BitOK, adds that the current DFA issues are experimental and hold no real value due to a lack of demand.
Nonetheless, Mikhail Uspensky acknowledges that capital markets for Russian businesses have dried up, prompting many companies to explore creative fundraising solutions, including DFA experimentation.
Looking toward the future of DFAs in Russia
Despite the skepticism, there are some promising developments in the DFA market, such as the incentive program for Norilsk Nickel employees, which links DFAs to the company’s shares.
While the employees will not own the shares themselves, the program could potentially increase individual ownership of authorized capital from 10% to 25%.
Vyacheslav Blagirev agrees that the secondary DFA market is currently hindered by a lack of well-developed processes for interaction between brokers and trading organizers.
However, he expects that the implementation of necessary mechanisms will form the market and establish synergy between traditional participants and DFA technologies.
Blagirev anticipates that by the end of the year, landmark projects will emerge, accelerating the establishment of the DFA market in Russia.
As Russia’s DFA market continues to evolve, it remains to be seen whether the recent resurgence will translate into long-term growth and success. While challenges persist, the potential for significant DFA projects could reshape the landscape for Russian businesses seeking financial freedom.
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