Cryptocurrencies and DFAs differ in their intended use.
- Cryptocurrency is primarily designed for payments but can also serve as an investment tool. However, in Russia, the use of digital currencies (the law does not use the term "cryptocurrency," so we refer to it as "digital currency") for settlements is currently prohibited, except for international trade (foreign economic activity, or FEA).
- Digital Financial Assets (DFA), on the other hand, serve as investment instruments and can certify:
- Monetary claims
- Claims for the transfer of issued securities (e.g., shares, bonds)
- The right to exercise rights from issued securities
- Participation rights in the capital of a non-public joint-stock company
Legal Framework for DFAThe issuance, accounting, and circulation of DFAs are regulated by
Federal Law No. 259-FZ "On Digital Financial Assets" (the
DFA Law). DFA transactions are conducted within information systems operated by entities supervised by the
Bank of Russia.
- Key Differences Between DFA and CryptocurrenciesRegulated Environment: DFAs are accounted for in CeFi (Centralized Finance) systems, where operators are legally responsible for ensuring users' rights, as established in Article 9 of the DFA Law. This level of accountability does not exist in decentralized cryptocurrency markets.
- Legal Status in Russia: DFAs operate within the Russian jurisdiction, providing legal protection for various participants. This allows for dispute resolution both through regulatory and law enforcement agencies (extrajudicial process) and via legal proceedings.
Thus, while
cryptocurrencies exist in a largely decentralized and often unregulated space,
DFAs function within a well-defined legal framework, ensuring security and investor protection.