Sovcombank no longer considering creation of own CFA platform, focusing on integration with various operators

ST. PETERSBURG. July 4 (Interfax) - Sovcombank is no longer considering the creation of its own platform for issuing digital financial assets (DFAs) and will instead focus on interoperability, allowing the bank's clients to purchase DFAs from different platforms within its app, the bank's deputy board chairman and head of its corporate and investment division, Mikhail Avtukhov, said in an interview with Interfax.

DFAs are digital equivalents of securities issued as records in an information system (IS) based on distributed ledger technology, confirming an investor's rights to an asset. Sovcombank issues them on the SPB Exchange's platform. Last September, the bank said that it might create its own platform if it saw growing demand from clients.

"We believe that in the long term, this [creating the bank's own DFA platform] does not represent any serious fundamental value or competitive disadvantage or advantage. We are currently working on interoperability so that it's possible to trade different DFAs, DFAs from different ISs and different digital platforms in one place. In our view, this is the key and most interesting direction in DFA development. The goal is for one investor to be able to manage DFAs issued on different blockchains, by different ISs, in one place, and trade them similarly to an exchange or near-exchange market. That is, with order books, quotes and so on - this is what we're working on," Avtukhov said on the sidelines of the Central Bank of Russia's Financial Congress.

"We believe that either we or other platforms will refine such solutions and offer them to the market in the foreseeable future. And in practice, it won't make much difference which information system is used for issuance. It will become clear that competitive advantage or significance lies with platforms that can provide such interoperability and convenience for investors," he said.

Currently, the Central Bank's register of DFA platform operators includes 15 participants. Four of them are banks, while another five platforms are subsidiaries of credit institutions or belong to groups that also include banks.

The volume of primary placements of DFAs last year grew ninefold, reaching 594 billion rubles. Around 90% of the market is now occupied by DFAs equivalent to short-term bonds, the Central Bank said.