Russia’s State-Owned Bank Subsidiary VTB Signed Its First Major Deal With Digital Financial Assets: Details

• VTB Factoring has announced the first major deal with digital finance assets. VTB Factoring is a subsidiary of a state-owned bank in Russia.

• The bank subsidiary announced that the deal is its first issuance and placement of digital finance assets protected by cash in the Russian Federation.

• Anton Musatov, CEO of VTB Factoring, also highlighted that the latest technology has the necessary potential in accessing the business of Russia to the funds needed for conducting operational activities. 

A subsidiary of a State-owned bank in Russia, VTB Factoring has signed its first major deal with digital finance assets. Under the deal, VTB has received a tokenized debt pool of Metrowagonmash, an engineering firm, issued through Lighthouse, a fintech platform.

VTB announced the deal on its webpage on Wednesday, June 29. The subsidiary declared the deal is its first issuance and placement of digital financial assets which are secured by cash in the Russian Federation. The bank makes its comparison with the issue of short-term commercial bonds in the announcement.

VTB Factoring CEO Anton Musatov pointed out that the latest technology possesses the potential in accessing the business of Russia to the funds required for conducting operational activities. 

It’s not necessary for the client to sign a service contract in order to sell its debt pool excluding the standard factoring procedure. The decision of the factoring bank and the willingness of the issuer to tokenize it is what matters added the CEO. Sber, the largest Russian bank, announced in June 2022 that its first operation with digital financial assets (DFA) to happen in Mid-July after getting a license from the central bank of the country.

The current legislation regarding the DFA was enforced in 2020. While in June 2022, the head of the Financial Markets Committee of the Russian parliament’s lower chamber, issued a bill that will ban the DFA’s use as a “monetary surrogate.”

With “digital rubles” VTB ran its first successful testing of the operations in February 2022. Digital Rubles is a central bank digital currency (CBDC) project of the Bank of Russia. Later, the bank made the announcement regarding its first purchase of DFAs in exchange for the digital ruble.

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Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.