Russia’s Finance Ministry is mulling ways to bring more liquidity to the market by giving a green light to DeFi organizations.
With sanctions against Russia starting to bite, Moscow is seeking new ways to keep its markets afloat by legalizing decentralized finance.
Speaking at Crypto Summit 2023, Finance Ministry official Ivan Chebeskov revealed that the move aims to bring more liquidity to digital financial assets (DFAs), a tokenized form of traditional derivatives or real-world assets. The ministry is actively supporting the development of DFAs but understands that in their current form, these assets “will not work,” Chebeskov was quoted as saying by Interfax news agency on Sept. 12.
“We actively advocate developing of DFAs, but we understand that DFAs alone will not work, we need a bundle of DFAs and the decentralized world of finance to use the liquidity that already exists in decentralized finance, [to use] the liquidity that people have in cryptocurrencies so that through these assets they can invest in DFAs in accordance with Russian law, invest in the Russian economy, in Russian assets.”
Ivan Chebeskov, Russian Ministry of Finance
Chebeskov admitted that DFAs are a segmental product as only ten platforms offer these assets so far and are registered with the Bank of Russia as of early September.
President Vladimir Putin signed the DFAs bill into law in 2020. The market has been desperately trying to bring investors since then. As of press time, the DFA market volume is around 25 billion rubles (approx. $261.7 million).
Chairman of the State Duma Committee on Financial Markets Anatoly Aksakov does not hesitate to say he “expected more” from the market, given how much effort was put into its legalization. However, he still believes the DFA market could hit 50 billion rubles in volume by the end of 2023.