In 2024, the first international payment using a digital financial asset (DFA) was carried out between Russia and Belarus, Head of the State Duma Committee on the Financial Market Anatoly Aksakov said. The Bank of Russia is also aware of DFA-enabled international transactions. First Deputy Governor of the Central Bank Vladimir Chistyukhin confirmed that this tool has been used by financial market professionals as well as corporations. Will DFAs actually become widely common in the cross-border market or will this instrument remain locally oriented? Are there restrictions and limitations to DFA use by foreign trade actors? Invest Foresight has interviewed leading experts in this industry.
Yevgeny Plaksenkov, Professor, Skolkovo Moscow School of Management
– Switching to digital assets has many advantages, which opens large prospects for DFAs. Development of this instrument nicely responds to three major trends in the economy: customer-centric approach, digitalization, and increasing operational effectiveness. These trends lower transaction costs and enhance asset turnover, while also providing greater comfort and reliability in investment processes. It’s no surprise that leading banks have emerged as key players in the issuance of digital financial assets.
Digital financial assets enhance businesses’ ability to secure financing across various sectors. By utilizing different forms of digital financial assets, improving their turnover periods, and ensuring reliable, well-founded returns, these assets have become a popular choice for investment during periods of stabilization and declining interest rates. Today, the growing interest in DFAs is already evident as the key rate reaches a plateau.
Currently, digital financial assets are primarily a local market tool. However, new legislative measures and international agreements among regulators of digital financial assets are expected to enable their use in global transactions. Despite this, regulatory mechanisms impose several restrictions on the participation of foreign entities. One such restriction is the mandatory use of Russian information and payment systems by all participants, which may not always be suitable for foreign parties. It is also important to consider that in the global market, the potential opportunities and risks for digital financial assets will be significantly influenced by a wide range of factors, including economic, political, legislative, technological, and social risks.
Danila Ladnyuk, financier, founder of D1 Capital family office
– In my view, digital financial assets are not merely a passing trend but a practical and effective tool. They are already being used to issue digital bonds, raise financing, and facilitate settlements within companies. If current trends persist, we can expect the market for digital financial assets to continue growing at double-digit rates annually. However, this growth will hinge on the further development of legislation, the trust businesses and investors place in the tool, and its integration with traditional financial systems.
Currently, DFAs are primarily utilized in Russia as a B2B solution, with major companies using them to raise capital and manage financial flows. As regards B2C sector, there are no accessible products that could appeal to the mass retail investor. Yet, in the long term, DFAs may become an alternative to traditional investment tools.
That said, DFAs largely serve as an instrument for domestic operations within the issuing country. Due to sanctions and regulatory constraints, Russian DFAs have limited access to global markets. On the international stage, digital assets are evolving towards cross-border payment solutions and digital bonds. DFAs may eventually become a globally recognized financial instrument if they are recognized internationally and are subject to standardized regulations.
Ilya Pereleshin, Investment Director, Atomic Capital
– For DFAs to achieve international recognition, a generally reliable international digital asset operator is required. Alternatively, a blockchain network could be created for decentralized transaction processing, ensuring no single entity controls over half of validator capacity. However, neither of these possibilities is expected in the near future. Traditional assets involve national or supranational depositories that have established a reputation for securing transaction accuracy and integrity. However, time has exposed their vulnerabilities, as shown by the Euroclear case. In the realm of DFAs, no single national operator exists; instead, there are multiple licensed companies authorized to issue and conduct operations. As a result, the foreign investor is exposed to both the issuer’s and the operator’s risks. While DFAs may appear to be accessible, they essentially cannot be used for active transactions that involve non-resident investors.