Assessment of Digital Financial Asset Platforms' potential in Russia: state support, benefits, development prospects, and relevance of application in the field of subsoil use.
Digital Financial Assets in Mining: Development Prospects and Government Support
Digital Financial Assets (DFA) differ from cryptocurrencies in that they are linked to real assets that have a value characteristic, such as gold, oil, and others.
DFA Platform (DFAP) is an online platform that provides investors with the opportunity to trade various digital financial assets, allowing them to participate in the investment of real sector projects using information technology and technical means.
Regulatory Basis and Government Support:
The Russian Government actively supports the development of DFAPs and pays special attention to their regulatory regulation. Federal Law No. 259-FZ, The Strategy for the Development of Small and Medium-sized Enterprises in the Russian Federation until 2030, The Strategy for the Development of the Financial Market of the Russian Federation until 2030, as well as the Order of the President of the Russian Federation V.V. Putin dated June 28, 2022 No. Pr-1130 are the key documents defining the legal basis and directions for the development of investment platforms.
Ways to Invest on DFAPs:
- Investments in securities: investing in digital securities, such as stocks or bonds, issued by companies or organizations.
- Purchasing utility digital rights: investing in utility tokens that provide access to a product, service, or platform offered by a project or company.
- Purchasing digital financial assets: investing in various types of digital financial assets, such as cryptocurrencies, stablecoins, project tokens, or non-fungible tokens (NFT).
Several DFAPs have already been registered and are successfully operating in the Russian market, such as:
"A-Token" is a DFAP developed by Alfa-Bank, one of the leading banks in Russia. The platform offers investment opportunities in various projects, including real estate, entrepreneurship, innovation, and even social and environmental initiatives. "A-Token" allows investors to participate in crowdfunding, crowd investing, and the acquisition of digital assets. The main advantages of the platform include transparency, reliability, flexibility, and accessibility for investors of different levels.
"Atomais" is a joint project of Sberbank and Rosbank, two of the largest banks in Russia. The platform is oriented towards investments in technological and innovative projects, such as artificial intelligence, robotics, blockchain, and other advanced technologies. "Atomais" offers various tools for investing, such as loans, securities, and digital assets. The features of the platform include a high degree of security and investment diversification, as well as access to unique projects and technologies.
"Lighthouse" is a DFAP created by VTB, one of the largest and most authoritative banks in Russia. The platform focuses on attracting investments into real sector projects, such as manufacturing, infrastructure, energy, and other sectors, which may attract investors interested in the development of the Russian economy. "Lighthouse" gives investors the opportunity to invest through loans, securities, utility digital rights, and other tools. The advantages of the platform include a wide range of projects for investment, reliability and transparency, as well as the ability to diversify investments.
Overall, all three digital financial asset platforms provide investors with the opportunity to participate in various projects, diversify their portfolio, and earn income from investments. They also provide businesses with access to additional sources of financing, which contributes to the growth and development of the Russian economy.
Prospects for Creating and Further Developing the DFAP "Subsoil of Russia"
The market for digital financial asset platforms in Russia is just beginning to develop, and therefore it is important to consider the prospects for creating new platforms capable of attracting investments into strategically important sectors, such as mineral extraction. The plan to create and develop the DFAP "Subsoil of Russia" has enormous potential, it can become an innovative and promising solution for investing in projects related to mineral extraction, such as - gold, oil, or titanium. The creation of such a platform can ensure transparency and reliability of operations, as well as access to investments in natural resources for a wide range of investors.
The main idea of the "Subsoil of Russia" platform is to create a digital financial asset that will represent a token tied to a real asset, for example, gold or oil. This will allow investors to acquire shares (tokens) in a gold mining project, and also, if necessary, easily and quickly convert their tokens back into fiat funds.
Price Formation and Growth of DFA Value During Prospecting, Geological Exploration, and Mineral Extraction. (DFA - Equivalent to 1 Gram of Gold Resources of a Prospecting Object, Example: Ulmensky Alluvial Gold Site - Junior Geological Exploration Project)
Price Formation and Growth of DFA Value During Prospecting, Geological Exploration, and Oil Extraction. (DFA - Equivalent to 1 Ton of Oil, Example: Oil Field in Irkutsk Region)
The interaction between the "Subsoil of Russia" investment platform and investors will be built on the principles of transparency, reliability, and convenience. The platform can provide investors with detailed information about projects, including risk assessments, potential returns, and development forecasts. To gather and verify such information, the investment platform requires the assistance of a reputable independent expert community, with the highest competence in this field, as well as a high trust rating from investors. In Russia, the only possible candidate for this role is the JSC "National Association for Subsoil Examination" - an association of production enterprises, project and expert organizations aiming to promote the creation of an efficient, innovation-driven, and globally integrated system for geological research and development of the Russian Federation's mineral resources through coordination of efforts of specialized participants in the field of subsoil evaluation. The involvement of such non-profit organizations is necessitated by the need for unbiased collection, verification, and analytics of the provided data to increase investor trust levels.
Furthermore, DFA can offer various other tools and resources for investment monitoring and market analysis.
Financing of Subsoil Use Objects Based on the Digital Financial Assets Platform - Subsoil of Russia
The development prospects of the "Subsoil of Russia" digital financial assets platform can be quite promising, considering the demand for gold, oil, titanium, and many other minerals. Such a platform will serve as a tool for attracting capital to the mineral extraction industry, stimulate the development of new technologies and infrastructure, and also provide additional opportunities for investors.
Key Advantages of Digital Financial Assets Platforms
Digital financial assets can be represented in various forms, such as cryptocurrencies, tokens, and others, and their usage can be linked with different interests and goals. A balanced observance of the interests of the state, population, and business can be achieved by developing relevant legal and regulatory mechanisms that will take into account the interests of all parties.
1. Transparency and reliability: Ensuring reliability and transparency of operations with digital financial assets for investors.
2. Accessibility and economic benefit: Digital financial assets can be created in various volumes and denominations, which increases their accessibility for the population and provides the opportunity to receive "natural rent" from the use of the country's mineral resources.
3. Security and Protection: Protection of digital financial assets is carried out using mechanisms similar to those used to protect citizens' property and non-property rights.
4. Socio-economic Balance: Achieving a balance of interests between the state, population, and business in the field of digital financial assets.
5. Global Accessibility: Digital financial asset platforms provide access to international markets, allowing investors and market participants to interact and cooperate without borders.
6. Transaction Speed and Low Fees: Digital financial assets, based on blockchain technology or other distributed ledgers, have several advantages, such as fast transaction execution and low fees compared to traditional financial institutions. These factors make digital financial assets more attractive to investors and users.
7. Decentralization: Many digital financial asset platforms are decentralized, meaning there is no single controlling party. This reduces the risk of manipulation and improves the system's security.
8. Transparency: Blockchain technology, underlying many digital financial assets, ensures transparency and reliability of all operations, simplifying audit and control.
9. Risk Fragmentation: Digital financial asset platforms allow investors and market participants to distribute their investments among various assets, thus reducing the overall portfolio risk.
10. Automation and Innovations: Digital financial asset platforms often include innovative tools and features, such as smart contracts, which allow automating processes and simplifying asset management.
11. Financial Inclusion: Digital financial assets and platforms make financial services accessible to a wide range of users, including those previously cut off from traditional financial systems.
12. Liquidity: Digital financial asset platforms provide high liquidity, allowing users to easily buy and sell assets with minimal time delays and losses.
13. Portfolio Customization: Digital financial assets allow investors to tailor and diversify their portfolios according to their risk profile and investment goals.
14. Reward Programs and Incentives: Many digital financial asset platforms offer various reward programs and incentives for participants, such as staking, mining, and liquidity pools, allowing users to increase their earnings.
15. Privacy: Some digital financial asset platforms offer enhanced security and privacy features, allowing users to maintain anonymity in their operations, if necessary.
16. Cross-chain compatibility: The ability to interact between different blockchains on one platform facilitates the exchange of digital assets and expands user opportunities.
17. Application Ecosystem: Many digital financial asset platforms support a diverse ecosystem of applications and services, such as decentralized finance (DeFi), insurance, rental, and games, which expands user capabilities and stimulates the development of innovations.
Perspectives for the Development of Digital Financial Asset Platforms
The prospects for the development of digital financial asset platforms look promising as they provide new opportunities for investors and businesses, simplifying the investment attraction process and making it accessible to a wide range of people. The future development of investment platforms may go through several stages of evolution:
1. Market Expansion: With the development of technologies and increased public awareness about the advantages of digital financial asset platforms, the number of investors and projects will grow. As a result, platforms will become more popular and competitive, leading to the emergence of new market participants and the expansion of products and services offered.
2. Integration with Other Financial Instruments: In the future, digital financial asset platforms will be integrated with traditional financial instruments such as bank accounts, insurance products, and pension funds. This will allow investors to easily manage their investments and receive comprehensive financial services through a single platform.
3. Deepening Market Segmentation: Over time, digital financial asset platforms will become more segmented to meet the specific needs and interests of different groups of investors and projects. For example, platforms specializing in certain sectors (e.g., green energy, real estate, social entrepreneurship) or types of investments (e.g., debt instruments, equities, digital assets) will emerge.
4. Regulatory Environment Development: Regulatory bodies around the world will continue to adapt legislation and the regulatory framework to account for the peculiarities of digital financial asset platforms. This may include the introduction of new rules and standards to ensure safety, transparency, and protection of investor rights.
5. Implementation of New Technologies: Digital financial asset platforms will continue to integrate new technologies to improve their services and meet user needs. For instance, using artificial intelligence and machine learning for data analysis and providing investors with more accurate forecasts and recommendations. Blockchain and other distributed technologies may be used to create decentralized platforms, ensuring even greater security and reliability of operations.
6. Globalization: In the future, digital financial asset platforms may become more globalized, providing access to international markets and projects. This will allow investors to participate in diverse projects worldwide and diversify their investments, and also provide businesses with access to new sources of financing.
7. Enhancement of Social and Environmental Responsibility: In light of the increasing importance of sustainability issues, digital financial asset platforms will pay more attention to social and environmental responsibility. This may include providing investors with opportunities to invest in projects aimed at improving the quality of life, protecting the environment, and reducing greenhouse gas emissions.
8. Development of Educational Programs and Investor Support: To attract more investors and increase financial literacy, digital financial asset platforms will offer educational programs, guides, and other resources that help users better understand the principles of investing and managing their finances.
9. Customization of Investment Strategies: Thanks to modern technologies and analytical tools, digital financial asset platforms will offer investors more personalized investment strategies that take into account their risk profile, preferences, and investment goals. This can help investors optimize their investments and achieve better results.
10. Cooperation with Other Fintech Platforms: Digital financial asset platforms will actively cooperate with other fintech platforms and services to provide their users with an even wider range of financial services and opportunities. For example, digital financial asset platforms can integrate with payment systems, credit services, or robo-advisors, creating comprehensive financial ecosystems.
Digital Financial Asset Platforms (DFAPs) represent a current and promising direction for the development of Russia's financial market. They contribute to attracting investments into the real sector of the economy, increasing access to investments for a wide range of people, and ensuring reliability and transparency for all participants. Regulatory support from the state, assistance from non-profit organizations in collecting and independently assessing information, and the active development of DFAPs create prerequisites for the growth of investment activity and stimulation of Russia's economic development.
The implementation of new digital financial tools, accompanied by mandatory objective cost assessment, technological and technical audit of completed works, will stimulate the development not only of junior but also other objects of various exploration stages. This approach will create the opportunity for direct public participation in highly profitable resource projects in the country.
Interaction with specialized companies in carrying out practical work and their phased evaluation by independent specialists encourages the involvement of a broad professional community. This, in turn, ensures the continuous improvement of the qualifications of the engineering and expert community based on leading industry universities.
In general, the prospects for the development of digital financial asset platforms appear to be very promising. However, the successful development of DFAPs in the future will largely depend on the regulatory environment, the level of investor trust, and integration with other financial instruments and technologies.