The Situation

Russia has approved a national framework to tokenize real-world assets—explicitly including property and shares—via a plan developed by the Ministry of Finance and the Bank of Russia. [CryptoRank] The key delta is not “Russia discovers tokenization”; it’s the state moving from ad hoc pilots to a co-designed issuance + trading system with the central bank inside the perimeter.

For market structure, this reads less like DeFi experimentation and more like a bid to stand up domestic capital markets plumbing that can survive sanctions pressure: on-chain ownership records, controlled transfer, and potentially new distribution paths for local savings into tokenized instruments.

This matters in the same week we covered LSEG building a multi-chain depository layer and Figure pushing issuer-controlled on-chain shares: Russia is choosing a third model—state-authored rails with monetary and securities regulators as architects, not just rule-setters.

The Mechanism

• Two-regulator design changes the control plane: with MinFin + Bank of Russia jointly authoring the plan, token issuance and secondary transfer rules are likely to be embedded into a permissioned compliance stack (whitelists, transfer restrictions, investor categories) rather than delegated to fragmented issuer/venue implementations.
• On-chain shares = cap-table modernization under constraints: “shares go on-chain” implies an intent to digitize the share registry / transfer agent function—but Russia will almost certainly require domestically supervised custodians and participant gating, limiting open-market liquidity while improving internal settlement finality.
• Property tokenization points to collateral velocity, not retail speculation: tokenized real estate/property claims are most powerful as bankable collateral (repo-like secured lending, margining, credit origination). Expect the early demand center to be credit and secured financing, not spot trading.
• Domestic distribution is the first flow; cross-border is the optionality: given sanctions and correspondent banking friction, the immediate “flow” is likely local currency savings → tokenized assets. Cross-border interoperability will depend on who is willing/able to touch Russian rails.
• A state-sanctioned market can compress post-trade ops: if the token becomes the system-of-record, Russia can reduce reconciliation across broker, registrar, custodian, and CSD-style entities—similar destination as LSEG, but with a single-jurisdiction mandate rather than a neutral market utility posture.
• Second-order: parallel infrastructure risk: Russia’s framework may create a sizeable tokenized market that remains structurally walled off from global liquidity pools—scalable internally, but discounted externally due to settlement/custody enforceability and legal-recognition concerns.

The State of Play

Market Position
Russia is positioning tokenization as sovereign market infrastructure, not a fintech feature. That’s a meaningful divergence from the UK’s gilt pilot model (state issues on a major bank platform) and from the LSEG approach (exchange-group builds a depository wrapper across chains). If executed, Russia could get faster domestic settlement and programmable compliance—but at the cost of being a largely closed ecosystem, where liquidity is a function of who the regulator permits to hold and transfer.

Regulatory Landscape
The notable move is the Bank of Russia’s participation—suggesting tokenized RWAs will be treated as regulated financial instruments with centralized oversight on custody, issuance permissions, and secondary trading venues. For non-Russian institutions, the gating questions won’t be technical (chain choice) but legal/operational: recognition of ownership, enforceability of token-holder rights, and whether any access path exists that doesn’t create sanctions or compliance exposure.

Key Data

• Projected tokenized asset market size: 13 trillion rubles (~$138B) by 2030. [CryptoRank]
• Asset scope explicitly referenced: property and shares (i.e., not just receivables or commodity-style certificates). [CryptoRank]
• Lead public-sector counterparties: Ministry of Finance + Bank of Russia as co-authors (signals integrated fiscal/monetary-regulatory intent). [CryptoRank]

What’s Next

Watch for the first design-specific artifacts: (1) which entities are licensed as token issuers/registrars, (2) whether the “shares on-chain” model is anchored to an existing registrar/CSD function or creates a new digital registry, and (3) whether secondary trading is routed through existing exchanges, a new ATS-like venue, or a bank-led network. Those details will determine whether Russia’s framework becomes a high-throughput domestic settlement upgrade—or merely a regulated wrapper with limited float and thin secondary liquidity.

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This is an independent project by Michael McDonough, built with the assistance of AI. Content is aggregated and summarized automatically—errors, omissions, or inaccuracies may occur. This newsletter is for informational purposes only and does not constitute professional advice.