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On 18 May 2021, a meeting of the RSPP Coordination Council on Digitalisation was held. Several topical issues, including the circulation of digital assets in Russia, were discussed, and the results of a survey of the RSPP community on the prospects and ways of using digital assets in financial and economic activities were considered.
In his opening remarks, RSPP President, Alexander Shokhin, noted the importance of the issues put forward for discussion. “The RSPP is focusing on creating conditions for digitalisation in all spheres of the economy,” he said.
Alexander Shokhin pointed out that the Coordination Council, together with other working bodies of the RSPP, began working on the development of digital asset circulation over three years ago. The RSPP took an active part in the creation of legislation on digital rights, and on the issuance and circulation of digital financial assets. The Coordination Council provides a platform for discussing the creation of digital infrastructure for industry, the use of artificial intelligence for digitalisation, and other topical issues. According to Shokhin, “it is now becoming impossible to compete without digital transformation, so this matter is getting more attention.”
Recommendations on the use of digital financial assets (DFAs) now need to be developed, not only from a regulatory perspective, but also for business, says Shokhin.
Digitalisation in this area provides a link between the real and financial sectors of the economy.
Vladimir Potanin, Co-Chairman of the RSPP Coordination Council on Digitalisation, President and Chairman of the Management Board of PJSC “MMC Norilsk Nickel”, noted that the adoption of the law on digital financial assets reflects the growing demand in the domestic market, and is helping to promote Russian goods and services in foreign markets. Digitisation open up new opportunities for entrepreneurs, and facilitates access to liquidity for small and medium-sized businesses.
At the same time, for many companies involved in the circulation of DFAs, it is now particularly important to have proper regulation in place, as well as transparent taxation in this area. According to Vladimir Potanin, “the law (on DFAs - ed.) is working”. Regulators took on board the comments provided by the RSPP when developing the law. “Further acts need to be adopted in the law on DFAs, and amendments made to the Tax Code, which will regulate this area, in order to avoid double taxation. The end result will be a regulation that is rather advanced, instead of merely adequate,” said Vladimir Potanin.
He mentioned several possible uses for digitisation, including the redistribution of liquidity from large companies to their vendors, and to small and medium-sized businesses that are limited in the amount of funds they can raise. Vendors of large creditworthy companies work on a deferred-payment basis. Vendors may experience cash shortages. An electronic marketplace is needed to send excess liquidity to vendors early. With a digital marketplace, companies or investors could offer their liquidity to trusted vendors of large enterprises.
“The arrival of smart contracts, digitised assets, goods and services, will likely revolutionise the ways in which goods and services are traded, as was the case with paper money, then electronic money,” concluded Vladimir Potanin.
RSPP Vice-President Alexander Murychev stressed that there was increasing interest in the digitalisation of transactions and assets in the real sector of the economy, and not just the financial sector. He added that, according to an RSPP survey on the prospects for using digital rights, great interest was shown in this topic within such industries as manufacturing, transportation and storage, as well as the financial and insurance industries.
He noted the importance of having a joint discussion on the circulation of digital financial assets and the digital rouble. “As our recent survey on the digital rouble has shown, companies in the real sector of the economy are awaiting such a tool, including to ensure the implementation of the mechanism for smart contracts, which is also important to implement on the basis of platforms for the circulation of digital assets. The digital rouble can become an important link between the circulation of digital assets and the payments system in the Russian Federation," said Alexander Murychev.
Andrei Lisitsyn, Deputy Managing Director of the RSPP Directorate for Financial Policy and Financial Markets, presented detailed results of the survey.
It was noted that representatives of large business in various fields from all federal districts took part in the survey. 43% of respondents said that they were actively exploring the digitalisation of assets, 34% of respondents were somewhat familiar with it, while only 6% had explored it thoroughly. For companies, the most promising aspects of the digitalisation of assets are the ability to use smart contracts (49%), inventory digitisation (43%), and monitoring inventory and capital flows (37%).
The digitalisation of assets is most relevant for the financial market (92%) and the payment industry (71%), while tourism (8%) and the housing and utilities sector (9%) show the least interest in DFAs.
However, just 37% of respondents plan to participate in the digitalisation of assets or the circulation of digital assets, of which 42% intend to act as buyers of assets, and 29% as issuers.
Alevtina Kamelkova, Managing Partner of Findustrial Consulting Group, and member of the Expert Council under the Coordination Council, spoke about the regulatory framework needed to establish a digital financial market in the Russian Federation. She elaborated on the Russian approach, against the backdrop of international DFA regulation. The law allows hybrid tokens to be issued in Russia, which facilitate far more complex obligations and relations than shares or bonds, and a more tailor-made product.
Director of Atomyze Russia, Ekaterina Frolovicheva, noted that its business is guided by Russian legislation, in particular, the law on digital financial assets. “The distinguishing feature of Atomyze's business is the versatility and uniqueness of its asset digitisation solution, be it goods or services - for market participants of any calibre. The first issuer on the platform will be Norilsk Nickel, whose products - gold, silver, palladium and platinum - are subject to fluctuating demand. The platform is built using modern IT architecture principles, that make it possible to scale its use for different industry verticals, providing access to any participants, and opening up a raft of opportunities for asset-building and investment to companies of all sizes, and, in future, to individual participants too,” said Ekaterina Frolovicheva, Director of Atomyze Russia.
Participants in the discussion noted that the Bank of Russia is currently registering the first platforms for the circulation of digital assets in Russia, and were also hopeful that in the near future all necessary procedures will be completed to enable the prompt launch of digital asset circulation in Russia based on platforms created in Russian industries.
The following persons also took part in the discussion: representative of JSC “Transmashholding,” Denis Iordanidi, who presented a report on initiatives in the digitalisation of assets, representative of the Eurasian Development Bank, Ivan Kolpashnikov, and representative of Sberbank, Ernest Kaprelyants.
Further key areas of the RSPP's work on the digitalisation of assets were also noted:
- monitoring of law-enforcement practice and synthesis of proposals from Russian business to improve legislation on digital assets;
- identification, synthesis and standardisation of best business practices for using digital financial instruments.
The meeting was attended by RSPP Vice President, and Managing Director of the Regional Development Directorate, Sergei Mytenkov, Managing Director of the RSPP Directorate for the Development of Economic Sectors and Digital Transformation, Maria Yurgelas, Digital Development Director of the RSPP, Alexander Suraev, representatives of industry Commissions of the RSPP and the business community who expressed an interest in digital assets, and subject-matter experts.