Russian Government Considers Legalizing Defi DAOs for Investment Opportunities
The Ministry of Finance of the Russian Federation is exploring the option of legalizing decentralized financial organizations known as ‘defi DAOs’ (Decentralized Autonomous Organizations). The ministry believes that this move could allow liquidity from the defi sector to flow into the market for Russian digital financial assets (DFAs).
Current Law on Digital Financial Assets in Russia
Currently, Russia’s law on “Digital Financial Assets,” implemented in January 2021, defines DFAs as digital coins and tokens launched by legal entities on private blockchains operated by authorized operators. This excludes decentralized cryptocurrencies like bitcoin. According to the Bank of Russia, the DFA market has already surpassed 25 billion rubles ($260 million).
Promoting the Connection Between DFAs and Defi
During a panel discussion at Crypto Summit 2023, Ivan Chebeskov, the director of the Department of Financial Policy at the Finance Ministry, emphasized the need for a link between DFAs and decentralized finance. He stated that utilizing the existing liquidity in defi and crypto assets held by citizens would allow investments in DFAs in accordance with Russian legislation. This would enable individuals to invest in the Russian economy and assets.
Reducing Fragmentation in the DFA Sector
Chebeskov highlighted that there are currently 10 platforms registered with the Central Bank of Russia that issue DFAs. He suggested reducing their number or establishing a single aggregator platform that also has access to decentralized finance and crypto assets. This would facilitate investments in DFAs and unlock significant potential for growth and opportunities.
The Legalization of Defi DAOs
Chebeskov stressed that legalizing DAOs is crucial for both DFAs and decentralized finance to develop more actively. He proposed classifying existing legal entities as digital DAOs if they meet specific criteria, instead of creating new legal definitions. Defi DAOs are autonomous organizations that leverage blockchain technology and smart contracts to automate and manage financial transactions without relying on intermediaries.
Hot Take: Unlocking Investment Opportunities through Legalized Defi DAOs
The Russian government’s consideration of legalizing defi DAOs demonstrates its recognition of the potential investment opportunities in the decentralized finance space. By connecting DFAs with the liquidity already present in defi, individuals can invest in Russian assets and contribute to the country’s economy. This move not only fosters growth in the DFA market but also encourages innovation in decentralized finance. With a focus on reducing fragmentation and establishing a unified platform, Russia aims to tap into the vast potential offered by defi DAOs.
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