- Under the new law, firms that have digital shares would not be able to return to the traditional model
- The Russian central bank would have to manually approve any security being considered for digitization
- Debates and negotiations about the bill have been intense
A local Russian news firm reported on the 21st of October that a new law being proposed would allow Russian companies to digitize securities, and use blockchain to store them. The Russian crypto industry is set to receive a face-lift once the proposed bill comes into law.
Securities on the chain
There has been a lot of anticipation for the new law that will allow businesses in the private sector to handle digital securities. The report states that the Russian State Duma intends to accept these digital securities as Digital Financial Assets (DFA). They state plans to allow companies in the private sector to create and trade the DFAs as digital stock. The Russian central bank will be in charge to certify this DFA data before it is stored.
The safety of these investments is highly stressed whereby the state intends to have the bill contain the definitions of the DFAs. Therefore, investors can seek court interpretations if they feel the law has been broken. If the bill were passed into law in the upcoming Duma readings, it would apply to existing limited liability firms as well as non-public joint stock businesses. However, as per RBC news, “once a company issues said assets, it will no longer be able to go public by traditional means.”
It was envisaged that the legislation on Digital Financial Assets would be passed hitherto July 1 of 2018. However, on March 20, a consortium of deputies headed by Anatoly Aksakov who is the chair of the Duma Committee on Financial markets tendered an almost similar version of the bill. The lodged document introduced Know Your Customer procedures for customer identification certification for cryptocurrency trading. The State Duma passed the proposal in the first three readings earlier this year.
Shortly after approval, the bill received condemnation from experts, and a lobby coterie began working on a rebuttal bill. As per the RSPP’s vice, Elina Sidorenko the Russian Union of Industrialist and Entrepreneur’s bill would quash contradictions in what she calls “unfinished and fragmented” bill.