Beautiful Virgin Islands

Monday, Jun 23, 2025

Russia Is Set to Create a New Regime for Tokenized Securities

Russia Is Set to Create a New Regime for Tokenized Securities

The new Russian “crypto” law provides a regulatory regime for tokenized securities and has no regulation for cryptocurrencies

Russian legislators have passed the nation’s first crypto law after discussing crypto regulation for the last five years. The bill, titled “On Digital Financial Assets,” has had dozens of versions that have varied from one another massively.

The version that was discussed last year didn’t have any identification of any digital currencies whatsoever. Another bill presented this year proposed jail sentences for buying large amounts of crypto with cash and large fines for smaller amounts.

While the current version mentions digital currencies, it is not going to send Russian traders to the decentralized gulag. Basically, it restricts buying goods and paying for services with crypto, while issuance and trading of digital currencies will be regulated by separate laws that will be discussed in the future.

The reason for this is that the so-called, much anticipated “crypto regulation” isn’t about crypto at all.


Digital financial assets equal security tokens

According to the new law, digital financial assets, or DFAs, represent digital rights, including monetary claims, the possibility of exercising rights under issuable securities, the right to participate in the capital of a nonpublic joint-stock company, and the right to demand the transfer of issuable securities.

In a broad sense, this means that DFAs are tokenized securities. Basically, the new Russian law regulates the issuance, turnover and offering of tokenized assets.

DFAs can be purchased using fiat - Russian rubles and foreign currencies - and other DFAs. Additionally, in the secondary market, they can be exchanged for digital utility assets. But they can’t be purchased for crypto - I mean, “digital currencies.” That’s the name that they’ve chosen for crypto.


Some top coins might have problems in Russia

So, there is a long, exhausting definition of digital currencies in the law. However, there is one main principle I would like to take into account:

This significant characteristic might cause uncertainty for some of the top-20 cryptocurrencies defined as digital currencies according to Russian law. It might affect tokenholders of Tether (USDT), TrueUSD (TUSD) or XRP, as issuers of all these tokens have some obligations. This would have a negative effect, as Russian residents won’t be able to trade what qualifies as a digital currency.


No room for startups


If you thought that the new regulation would spark a new wave of Russian startups for the issuance and trading of DFAs, you thought wrong. DFAs can be only issued on licensed issuance platforms that are operating in full compliance with incredibly strict regulations.

In order to obtain the necessary license, a company must build an incredibly complicated structure that includes: internal control services, risk management services, etc.

This structure is similar to the one that professional participants of the capital market already have. Moreover, as all activities in this sector will be regulated by the Bank of Russia, one might think that the whole structure was designed for large financial institutions that already operate in the market.

The role of startups in the market will probably be limited to users of platforms - ones that are willing to raise capital for their businesses. But there is a significant hurdle here: Because the DFA infrastructure is quite closed, and one might say that it is quite isolated, it will be incredibly hard to attract foreign investors.

Outside of that, there are several technical requirements that issuance platforms must have, including performing Know Your Customer verification, and they must be able to freeze or confiscate assets if decided by authorities. However, there are no blockchain requirements for issuance platforms. Basically, the platform may be built without blockchain technology.


Utility tokens and asset-backed tokens


So, you can’t use digital currencies as a payment method, and there is still no regulation for crypto in the new law. But last year, Russian legislators enacted the so-called “Crowdfunding Law,” allowing the issuance of digital utility assets (read: utility tokens). These tokens may grant rights to receive goods and services. Additionally, there is a place for asset-backed tokens within the same law, so there might be some action from Russian companies in this area in the near future.

Digital utility assets were mentioned in the DFA act as well. It allows licensed DFA platforms to issue and work with these assets, and they can even be combined and exchanged with DFAs.


Will it be possible to work in this market?


Yes, the current framework will allow the issuance of assets, but the main question is: Why? Well, I don’t have the exact answer now, but there are some use cases.

There is a great opportunity to offer tokenized bonds - which are currently available to qualified investors only - to a wider audience, but it is a suitable solution for big market players only. It could’ve been a great regulated fixed-income instrument for crypto investors, but for now, there are no investments in DFAs with crypto.

Another is tokenized equity/security that will allow investors to participate in profit-sharing. Although, it will be more suitable for big market players too. As I can judge right now, the new crowdfunding regime will be way more suitable for small and medium-sized enterprises or startups. Perhaps it will even be possible to mix it with tokenization.

Right now, there are a lot of unclear issues with this law. It’s ironic that with all this time spent to create crypto regulation, there is no crypto regulation. However, Russian legislators managed to create a clear approach to the regulation of tokenized securities.

It’s not ideal, and some parts of the law desperately need further work, while some are rather strange, mysterious even. But there is still hope that, in time, there will be a new market.

The likely scenario is that someone will start working in this market and will help regulators change their minds about some things in the law. But right now, crypto projects that could’ve started working in Russia will continue to work as they did before: in an unregulated manner or simply outside of Russia. Additionally, all Russian market players will have to wait and see how “digital currencies” will be regulated in the future and what the Bank of Russia will come up with.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
×