New bill could lead MOEX to become a registered digital asset exchange

We want the market to make its own choice between blockchain accounting and depositary accounting: Chairman

The Moscow Stock Exchange (MOEX) has decided to introduce a bill that will allow depositaries to issue receipts for trade in digital financial assets (DFAs), Russian newspaper Vedomosti reported earlier this week.

The bill is currently under consideration by the Russian Central Bank, which independently cannot introduce legislation.  

MOEX supervisory board chair Sergei Shvetsov told reporters at a banking forum, “Banks of Russia – XXI century,” that the bill will allow trading both in DFAs and securities based on them.

This will allow investors to choose between directly investing in DFAs or shifting the custodial risks of opening accounts in distributed registries to the accounting infrastructure via securities.

“The exchange and its subsidiaries will turn to the regulator, and I hope that they will receive the status of an exchange operator,” the chairman explained, referring to how the direct release of DFAs will work.

Shvetsov clarified that the exchange wants to let the market to make its own choice between blockchain accounting and depositary accounting. If the bill receives approval, Russian depositories will be able to hold DFAs in their accounts on the blockchain and redeem the certificate to withdraw the underlying asset whenever the client requests the same.

The behavioural habits of Russian business and the population are “dragged” into centralized structures, the chairman stated, adding that the lack of familiarity with distributed ledger technology becomes a barrier:

“When you don’t know who to call and who to sue, many people don’t want to participate. [but,] It’s a blank sheet that we can draw whatever we want on, according to the needs of the economy and investors.”

In July, State Duma finance committee chair and head of the Russian Banking Association Anatoly Aksakov called for MOEX to follow in the footsteps of the Toronto Stock Exchange and the Deutsche Boerse to become a cryptocurrency exchange.