Last week, on September 19, on the Denezjniy Lane in Alfabank and on September 20 at the main platform of the Moscow Exchange on Vozdvizhenka Street in Moscow, regular meetings of the ARC (Anticipatory Regulation Compliance for Digital Assets) in the format of round tables were held.
At the open extended meeting, regular participants of the Working Group, representatives of the Moscow Exchange, NSD (National Settlement Depository), Sberbank, Alfabank, Group IB and AltHaus Group, chaired by AddCapital (Alexey Prokofiev, AddCapital managing partner, AddVenture partner and chairman of the ARC Working Group; AddCapital — company developing innovative investment products for traditional and alternative markets).
Key points from the ARC report are divided into four areas:
1. Traditionalization of the DFA
ARC participants developed the Requirements for Institutional Packaging Technology for Products with the DFA and for the Perceptron investment strategy classes for large investors with the goal of obtaining limited and protected exposure to the DFA through familiar tools.
The technology gives the regulator 100% supervision by traditional methods that do not require additional tools, full transparency, payment of taxes and exclusion of withdrawal of funds and all possibilities of “financing extremism”.
For Qualified Investor technology gives an externally familiar product structure, which is protected from technological and cyber risks associated with the DFA, 100% in the legal field, and Perceptron classes of strategies allow you to effectively withdraw income from a risky DFA and automatically save it to less risky products, adjusting exposure to risk.
Technologies and strategies are specifically developed by AddCapital at the request of the ARC WG.
2. Custodial storage of the DFA
The technology relies on several custodial storage solutions, which is a sticking point in the development of the DFA infrastructure. While the solutions developed by AddCapital together with Group IB are already being used (https://www.group-ib.ru/media/gib-addcapital/), the test phase included the D3ledger solution — the international depository storage platform of the DFA — on tests in one of the AddCapital funds. With success, it is possible to count on the use of this decision by NSD (National Settlement Depository in the Russian Federation) after national depositories of other countries, together with AddCapital, Sberbank and Alfabank to validate the solution in the Central Bank through the “Sandbox of the Central Bank” (https://www.kommersant.ru/doc/3658081).
Also on testing is the addSig solution proposed and invested by AddCapital for ARC.
3. Tokenization of traditional assets
Guests of the extended meetings were: Christoph Van de Reck (President of the NEM Foundation), Rikiya Masuda (head of bitFlyer’s European division, stock exchange licensed in Japan, Luxembourg and the USA), Dominic Valskerts (board member of the VNX Exchange), Alexander Tkachenko (founder of the VNX Exchange) , Zing Young (Litecoin representative).
The guests described in an interesting and detailed way the state of affairs in the world regarding technology and regulation of tokenization and its applied aspects, the interests of market participants and big business.
According to the participants of the discussion, one should expect a significant improvement in the liquidity of even relatively small assets (a little less than $200m ) with their tokenization and controlled accessibility to the whole world. At the same time, current legal restrictions as well as restrictions related to the restrictions or lack of recognized regulated custodial decisions were disclosed.
AddCapital is considering several key partnerships that can create compelling and regulated products using the benefits of tokenization. Among them, VNX Exchange is a Luxembourg-regulated exchange with a focus on the tokenization of secondary venture capital shares (https://forklog.com/vnx-exchange-i-addcapital-namereny-tokenizirovat-aktivy-venchurnyh-fondov-na-20-mln/) .
Within the framework of the ARC, AddCapital expects to find a tool to give liquidity to late-stage venture capital funds, which can allow creating high-yield products and giving them access to a wide range of qualified investors, as well as allowing venture capital investors to go out earlier than in 3-7 years. Other AddCapital partnerships do not disclose.
4. Regulator Trends
Luc Frieden, former Minister of Justice and Finance of Luxembourg, member of the Board of Directors of the Luxembourg Stock Exchange and Chairman of the Board of the largest Luxembourg bank BIL (Banque Internationale a Luxembourg), also spoke at the open meeting.
‘Today, Luxembourg is one of the most developed financial centers of Europe due to a stable political background and well-built legal support of the financial sector. A developed financial ecosystem allows the government to stimulate innovation in the financial sector. To strengthen the leading position of Luxembourg as the leading financial hub, we intend to further develop the regulation and infrastructure for fintech entrepreneurship’, said Luc Frieden (https://www.rbc.ru/crypto/news/5ba36e1f9a7947005e1d64b0).
He also stated that the law always follows technology, because in the legal field it is difficult to predict what this technology will bring. Therefore, there are three fundamental goals before the law: achieving financial stability, protecting investors, and ensuring that new technologies cannot be used to commit financial crimes.
Earlier, at meetings on June 13, A. Aksakov spoke on the main platform of the Moscow Exchange on the ‘Digital Rights’ as an approach to defining concepts in the new law (https://fomag.ru/news/zakonodateli-namereny-otkazatsya-ot-kriptovalyuty-v-polzu-tsifrovogo-prava/).
Среди важных достижений встречи оказалось заявление представителей ОСР о предложениях в отношении обсуждаемого сейчас в РФ закона о ЦФА. Рабочая группа ОСР предложила свои поправки и варианты к закону о ЦФА, который в настоящий момент находится на рассмотрении. Эти поправки касаются государственного регулятивного надзора и в первую очередь обеспечивают удобство для инвестирования в ЦФА крупного капитала.
Among the important achievements of the meeting was the statement of the representatives of the ARC on the proposals regarding the law that is currently being discussed in the Russian Federation on DFA. The ARC Working Group proposed its own amendments and options for the Law on the DFA, which is currently under consideration. These amendments concern state regulatory oversight and, above all, provide convenience for investing large capital in the DFA.
Besides the regular participants of the Working Group and invited guests, representatives of large banks (Gazprombank, VEB, Otkritie, Julius Bär, IBC), funds (DaVinci Capital, WhiteStone Capital, Target Global, InVenture, UFG Wealth Management, InVenture Partners , etc.) and management companies (ATON, UK UK Rosnano, UK AlfaKapital, etc.) took part in the expanded Round Table.