Is share tokenization no longer science fiction, but rather the near future? At the Retail Investors Forum, Sergey Shvetsov, Chairman of the Moscow Exchange Supervisory Board, confirmed that this topic is being actively discussed for entering international markets.
The Central Bank previously proposed the idea of "digital certificates" for the circulation of digital financial assets (DFAs) using exchange infrastructure.
However, only shares of non-public companies (NPJSCs) can currently be tokenized in Russia. This is prohibited for shares of PJSCs.
The main question: will a token become a full-fledged equivalent of a PJSC share, granting all corporate rights?
Our analysis confirmed that the transition to the tokenization of PJSC shares is a matter not only of legislative amendments but also of technological transformation:
Technological readiness. The issue of tokenization is not so much a question of the legal form of the asset, but rather the readiness of accounting system technologies. Tokenization requires the creation of reliable and scalable distributed ledgers (DLT) capable of replacing or effectively complementing traditional securities market infrastructure; Responsibility and reliability of systems. The emergence of tokenized shares of public companies raises the question of the market responsibility of new DLT platform operators. These systems must guarantee immutability of the registry, protection from cyberattacks, and settlement speeds comparable to existing exchange infrastructure.
High requirements for digital financial assets. Once such digital financial assets representing public company shares appear, the requirements for them and their distribution will be no less stringent than those for public offerings of public company shares and for such companies themselves. This means that the tokenization of public company shares will have to comply with all information disclosure, investor protection, and listing regulations, preventing this sector from becoming an unregulated "crypto market."
Ivan Makhalin and Ekaterina Belashova conducted a comparative analysis of the legal regulation of the technology using European and US examples and proposed several scenarios for the development of share tokenization in Russia. Contact us at lecap@lecap.ru, and we will email you the full version of the article.
The Central Bank previously proposed the idea of "digital certificates" for the circulation of digital financial assets (DFAs) using exchange infrastructure.
However, only shares of non-public companies (NPJSCs) can currently be tokenized in Russia. This is prohibited for shares of PJSCs.
The main question: will a token become a full-fledged equivalent of a PJSC share, granting all corporate rights?
Our analysis confirmed that the transition to the tokenization of PJSC shares is a matter not only of legislative amendments but also of technological transformation:
Technological readiness. The issue of tokenization is not so much a question of the legal form of the asset, but rather the readiness of accounting system technologies. Tokenization requires the creation of reliable and scalable distributed ledgers (DLT) capable of replacing or effectively complementing traditional securities market infrastructure; Responsibility and reliability of systems. The emergence of tokenized shares of public companies raises the question of the market responsibility of new DLT platform operators. These systems must guarantee immutability of the registry, protection from cyberattacks, and settlement speeds comparable to existing exchange infrastructure.
High requirements for digital financial assets. Once such digital financial assets representing public company shares appear, the requirements for them and their distribution will be no less stringent than those for public offerings of public company shares and for such companies themselves. This means that the tokenization of public company shares will have to comply with all information disclosure, investor protection, and listing regulations, preventing this sector from becoming an unregulated "crypto market."
Ivan Makhalin and Ekaterina Belashova conducted a comparative analysis of the legal regulation of the technology using European and US examples and proposed several scenarios for the development of share tokenization in Russia. Contact us at lecap@lecap.ru, and we will email you the full version of the article.