Overview of current news of the crypto-space

In our digest, we looked at some important news from the crypto industry over the past week:

• Russia is preparing for the launch of the digital ruble;
• European Union countries are launching a blockchain-based cross-border credential verification program for citizens;
• The Welsh government successfully tested a blockchain-based agricultural supply control system;
• The European Consumer Association (BEUC) calls on social platforms to tighten the rules for advertising cryptocurrencies;

And now for more details. Reading time: 8 minutes.

1. Sberbank will launch a platform for trading digital financial assets (DFAs) among individuals in June 2023. This was announced by Anatoly Popov, deputy chairman of the bank’s management board. CFA include four types of digital rights: monetary claims, rights to equity securities, rights to participate in the capital of a non-public joint stock company and the right to demand the transfer of equity securities. Citizens will be able to buy and sell CFA. The volume of CFA issuance on the platform already amounts to billions of rubles, the number of issues approaches the third tenth. The platform expects to connect the largest borrowers who are planning to issue digital assets for tens of billions of rubles. Before opening access to the platform to individuals, Sberbank developed special scoring for its clients so that private investors could consciously make an investment decision, understanding the quality of the issuer in whose digital assets they plan to invest.

2. Expobank conducted a successful targeted issue of digital financial assets (DFA) on the Atomise platform. The issue amounted to ₽1 million with an interest rate of 8% per annum and maturity of 7 days. The CFA issue was a pilot one for Expobank, and the Atomayz platform showed its efficiency. In future, Expobank plans to expand application of CFA to other types of assets.

Cryptocurrencies and CFA are currently in the focus of attention of financial institutions. Late last year, Sber, Russia’s largest bank, conducted its first CFA transaction for gold on its own blockchain platform. Alfa Bank also launched a ₽10 million test issue of digital financial assets, and Nornickel launched rewards for its employees in the form of CFAs that are linked in value to the corporation’s shares, minetoken. Last month, real estate-backed CFAs appeared in Russia, with an issue size of 10.4 CFAs.

CFA are in the development stage, but their popularity is growing. In April, Russia issued CFAs worth ₽1 billion, and as of May 2023, Russia issued CFAs worth more than ₽2 billion (less than $30 million). However, the Central Bank of Russia is not satisfied with the pace of development of the digital financial assets market and believes that the existing conditions for their development are insufficient. However, Anatoly Aksakov, head of the State Duma Committee on Financial Market, believes that the current situation will change with the launch of the digital ruble. In the long term, CFA may become an analogue of traditional instruments for digital investments.

3. European Union countries are launching a cross-border credential verification program for citizens, which will be based on blockchain technology. The project is being developed as part of a collaboration between blockchain solution provider Protokol and the EBSI VECTOR project, funded by the European Union. The main goal of the project is to facilitate the validation of professional credentials for EU citizens, such as diplomas, qualifications and work experience obtained in other European countries. The collaboration should produce a scalable blockchain solution that can be deployed in all EU countries. EU citizens will be offered a special digital wallet to record and store digital data, which will allow for secure cross-border verification of documents. The EBSI VECTOR project and Protokol plan to create a more open, secure and decentralized digital infrastructure for the EU and other countries.

4. The Welsh government has successfully tested a blockchain-based agricultural supply chain control system. The experiment was conducted jointly with technology companies Prime UK and iov42, and the results showed the ability to track the supply chain of agricultural products from production to retail sales. The project aims to create local and global certification schemes, and to increase traceability and impartial control in the agricultural market. The organizers plan to create a blockchain-based automatic accountability verification platform for accreditation bodies, certification bodies, inspection bodies, testing laboratories, regulatory agencies, local authorities, and agricultural suppliers and their customers. This is the first project of its kind in Europe.

5. The European Consumer Association (BEUC) filed a complaint with European Union regulators, calling on social platforms Instagram, YouTube, TikTok and Twitter to tighten the rules for advertising cryptocurrencies. The organization believes that social networks should ban influencers from promoting crypto-assets because cryptomarketers mislead users and put them at serious risk. The BEUC also mentions so-called finfluencers, who often pose as experienced traders.

To ensure that cryptocurrency advertising does not contradict the advertising policies of platforms, cryptocurrency companies must be licensed to advertise their products and services. At the same time, the BEUC said that additional consumer protections are needed to prevent unfair market practices and protect users from large financial losses. State consumer protection authorities can impose fines on violators, but the BEUC has proposed tougher penalties.

BEUC calls on social networks to introduce stricter advertising policies, monitor the promotion of cryptocurrencies by Influencers and send reports to the European Commission on the effectiveness of the measures introduced.

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