MOEX to Legalize the Issuance of Receipts for Digital Financial Assets

MOEX to Legalize the Issuance of Receipts for Digital Financial Assets

The Moscow Exchange is all set to legalize the issuance of receipts for digital financial assets. The trading platform will allow the custodians to offer clients who are not ready to accept distributed ledgers to essentially work with securities. MOEX also plans to become a licensed crypto exchange.

Russian Stock Exchange Set to Enter Digital Asset Market

The leading exchange for equities and derivatives in Russia is ready with new legislation that would authorize depositories to issue receipts for digital financial assets (DFAs). The broad term "DFAs" encompasses cryptocurrencies in the absence of a more precise definition in Russia but largely refers to digital coins and tokens issued.

DFA receipts can be traded as securities, explained Sergey Shvetsov, who heads the Supervisory Board of the Moscow Exchange (MOEX). During the latest edition of the International Banking Forum, the top official informed that the exchange "will naturally enter this market" and stated:

"We have prepared a project that allows you to issue receipts for digital assets, then these receipts are circulated as securities."

MOEX has already filed the bill with the Central Bank of Russia (CBR) and will also coordinate the initiative with the Ministry of Finance. "The legislation will provide those who are not ready to work with distributed ledgers and are afraid of custodial risks an opportunity to transfer these risks and be able to issue securities," Shvetsov added.

"For DFAs to develop, we want to propose that the market itself choose blockchain accounting or depositary accounting," he further elaborated, reminding the audience that the Moscow Exchange also wants to obtain a license from the CBR to operate as a digital asset exchange. In August, MOEX announced its intention to launch a DFA-based product by the end of the year.

"If such a law is adopted, Russian depositories will be able to accumulate DFAs on their accounts on the blockchain and issue receipts against them to their clients. If the customer needs the underlying asset, he can cancel the receipt and receive his digital asset on his blockchain account," Shvetsov was quoted as saying by the Prime business news agency.

Support has been growing in Moscow to permit the use of digital assets such as cryptocurrencies for international settlements amid sanctions. Although it is unclear whether regulators will allow its circulation in the country. However, the Head of the Parliamentary Financial Market Committee, Anatoly Aksakov, recently said that the stock exchanges in Moscow and Saint Petersburg are ready to provide it.