- Through this bill, the Moscow Exchange (MOEX) will allow depositories to issue receipts for digital financial assets (DFA).
- The Central Bank is currently reviewing the bill drafted by the MOEX.
- It is yet to be determined whether the crypto assets will be sold through brokers or directly to the final buyer.
- The demand for crypto assets and related services is ever-increasing, and many countries are finding their own ways to meet that demand. Among them is Moscow Exchange (MOEX), which is also taking matters into its own hands to become the country’s very own cryptocurrency exchange.
According to a report by the daily newspaper Vedomosti, the MOEX has drafted a bill that will provide the exchange with the necessary powers to act as a crypto exchange. The bill is currently at the mercy of the Central Bank, which will decided whether or not the people of Moscow will enjoy the two forms of crypto offerings.
As stated by the Chairman of the Supervisory Board of the Exchange, Sergey Shvetsov, the bill will allow for the issuance of a receipt for crypto assets. These receipts can be used and traded as securities for individuals that are not comfortable with the custodial risks of associating with a distributed registry.
The second offering will be the direct release of cryptocurrency assets, as Shvetsov explained that MOEX would be appealing to the regulators to receive the status of an exchange operator and eliminate the need for a third-party operator.
Commenting on the same, Shvetsov explained,
“We want the market to make its own choice, blockchain accounting or depository accounting, and if the law is adopted, then Russian depositories will be able to accumulate DFA on their accounts in the blockchain - as soon as the client needs the underlying asset, he will repay the receipt and receive the asset on his account in the blockchain.”
Taking the centralized route
Despite propagating the adoption of crypto through this bill, MOEX and other crypto services will maintain a centralized structure. The reason behind this given by Shvetsov is that people need to ensure that there is someone that can answer them should something go south. Shvetsov stated,
“When it is not clear who to call and who to sue, many do not want to participate in this.”
The bill, however, could take time to come to life as it is currently being reviewed by the Central Bank of Russia.
Moscow Exchange is also drafting bill on digital financial assets and securities trading
Speaking at a banking conference, MOEX supervisory board chair Sergei Shvetsov said the bill in preparation foresees trading in both DFAs and DFA certificates that would trade like securities. “The exchange and its subsidiaries will apply to the regulator and I hope that they will receive the status of exchange operators” to trade in DFAs, Shvetsov said. He added:
“We want the market to make its own choice between blockchain accounting and depositary accounting, and if the law is passed, Russian depositories will be able to hold DFAs in their accounts on the blockchain — as soon as the client needs the underlying asset, they redeem the certificate and receive the asset in their account on the blockchain.”
Lack of familiarity is an impediment to distributed ledger technology in Russia, according to Shvetsov. “When you don’t know who to call and who to sue, many people don’t want to participate,” he said, but “It’s a blank sheet that we can draw whatever we want on, according to the needs of the economy and investors.”
Shvetsov said that the bill is currently under review by the Russian Central Bank. State Duma finance committee chair and head of the Russian Banking Association Anatoly Aksakov suggested in July that MOEX become a crypto exchange, following the examples of the Toronto Stock Exchange and the Deutsche Boerse.
A MOEX spokesman said in August that the exchange expects to be permitted to trade DFAs. “It’s in the interests of our clients,” MOEX International managing director of strategy Artem Zheleznov said.
