A Russian company has announced the country’s first sanctioned transaction involving digital financial assets (DFA) using a foreign currency, the Chinese yuan. The transaction, which is the largest to date in accordance with the current Russian DFA law, covers the issue of tokens secured by commercial debt.
Digital financial assets for the transaction are issued in Russia
A licensed firm has completed the first transaction in Russia with digital financial assets denominated in foreign fiat. The deal included the issuance of DFA in the amount of 58 million Chinese yuan (about 516 million rubles or $8.26 million) secured by commercial debt.
It took place on a platform developed by the Lighthouse financial technology company, which was approved by the Bank of Russia in March as one of the “operators of information systems”. The company is allowed to manage digital financial assets. Sberbank, the largest Russian bank, and Atomyze tokenization service were also registered as such.
While the Russian authorities are working to adopt a more comprehensive legal framework for all digital assets, including cryptocurrencies, the law “On Digital Financial Assets”, which entered into force in January 2021, regulates some transactions with coins or tokens that have an issuer.
Officials in Moscow now want to legalize cryptocurrency payments in cross-border settlements and expand the use of the ruble and national currencies of partners such as China in foreign trade. The main reason is to circumvent the restrictions imposed by the West and reduce Russia’s dependence on the US dollar and the euro.
Lighthouse noted that the first DFA operation involving foreign currency also became the largest placement of its kind on the country’s digital financial assets market.
Transaction details
The maturity of the issued tokens is 29 days, and the interest rate is 4%, the fintech company clarified, emphasizing the advantages of DFA compared to short-term lending in rubles, which is provided at a rate of 9-10% per annum. It is also noted that DFA reduces the risks for issuers of losses from currency fluctuations.
Lighthouse CEO Denis Iordanidi believes that the new financial instrument will provide an opportunity to make cheap short-term investments without competing with the traditional bond market, which offers long-term financial investments. According to a survey conducted in November, 37% of Russian companies are ready to enter the DFA market as issuers, the report says.
