Russia’s largest private bank, Alfa Bank, is only the fourth organization to obtain a Digital Financial Assets (DFA) license from the Bank of Russia. In 2021, Russia introduced new regulations that cover some tokenized traditional assets, as well as the tokenization of real-world assets, but exclude cryptocurrencies.

Until now, existing licensees have primarily focused on the use of blockchain instruments for factored invoices and precious metals such as palladium and gold. Alfa Bank will take a similar approach with tokenized ‘monetary claims’ and the tokenization of physical assets, including precious metals.

Alfa Bank says that its A-Token platform will be used to raise money for companies from all kinds of investors, including individuals and professionals, and plans to issue some tokens itself.

“We see the effectiveness of the technology and its ability to transact with the customer directly, reducing costs and risks,” said Denis Dodon, Alfa-Bank’s Chief Innovation Officer.

The other three DFA licensees are Russia’s largest bank Sberbank, Norilsk-based Atomyze and startup Lighthouse.

Much has been made about the potential for Russia to use digital assets or cryptocurrencies to circumvent sanctions. Both Sberbank and Alfa Bank are heavily sanctioned. Norilsk is not, although its largest shareholder, Vladimir Potanin, is.

In response to the talk, Europe tightened its sanctions on Russian cryptocurrencies. Russia’s central bank seems reluctant to encourage any use of cryptocurrencies, but other government departments seem interested. The central bank is developing a digital ruble central bank digital currency (CBDC) with work on cross-border payments to start this quarter.