The Russian Central Bank intends to use digital asset representation solutions to give foreign investors access to shares of local companies, with a Russian media outlet, RBC, reporting that local industry insiders say a blockchain-based solution could be “viable and attractive for foreign investors.”
Vladimir Chistyukhin, first vice president of the Central Bank, addressed the topic on the sidelines of a recent financial forum and noted that digital representation of Russian stocks was a “possible option.”
Central Bank of Russia: Digital representation of assets could help companies avoid sanctions
Chistyukhin emphasized that foreign players will have to offer technical and platform-based solutions, saying:
“In this sector, foreign partners will play a central role, and I am talking about foreign entities that want to digitally represent Russian assets in order to buy and sell them abroad.”
Chistyukhin’s comments follow a proposal made by Sergei Shvetsov, chairman of the board of directors of the Moscow Stock Exchange, who said – at the end of September this year – that foreign investors wanted to buy Russian stocks and that the digital representation of these assets could make it easier for them because it did not depend on “infrastructure subject to sanctions”.
Shvetsov also explained that policymakers in Moscow are openly discussing the digital representation of Russian stocks, and that the stock market appears to believe that solutions backed by traditional finance tend to use “sanctioned infrastructure and intermediaries,” a problem that has become “unfortunately common in Russia today.” He added that digital representation of assets is one of several potential alternatives being considered.
Russian experts support digital representation of shares project
RBC cited an official from Russian banking group Sovcombank who supported the proposal, saying that digital representation of assets “could become a suitable tool for investors” in BRICS countries or in “friendly jurisdictions such as the United Arab Emirates, Kazakhstan or Armenia.” enia.
He also added that the digital representation of assets – in the long term – could “accelerate the pace of inclusion of the Russian market into the global digital financial system.”
For his part, Alexey Korolenko, CEO of Cifra Markets, agreed and said that digital representation of assets would allow traders with limited capital to buy shares of stocks with huge market capitalization. Korolenko then explained that the digital representation of tangible assets (RWA) sector is now “hot” and “attracting significant demand from investors.” He concluded by saying that the idea of a digital representation of Russian stocks is “viable,” but he warned that Moscow must ensure that providers meet reliability requirements “for the ownership network and digital representation of assets.”
Experts noted that regulators will need to consider infrastructure and liquidity issues, as well as potential “political risks.”
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