VTB Factoring and Lighthouse Completes First Blockchain-backed DFA Deal

VTB Factoring, a subsidiary of VTB State Bank has announced that it has completed the very first transaction featuring blockchain technology and Digital Financial Assets (DFAS). According to the outfit, the achievement was made possible with its partnership with Lighthouse, a fintech startup that develops blockchain-based solutions.

Per the transaction, “the issuer’s commercial debt was tokenized on the platform of the Lighthouse information system operator, after which VTB Factoring bought out this CFA issue. Thus, the first issue and placement of digital financial assets secured by monetary claims were made.”

This notable milestone positions Russia in the limelight as there have been talks of the embrace of Digital Financial Assets for quite some time now. The tokenization transaction afforded all parties to operate with a significantly streamlined process that would have otherwise been elongated through the traditional means of settling the CFA.

“The first deal with CFA opens a new digital commercial finance market in Russia. We are pleased to take a direct part in its implementation as the first investor in the CFA,” said Anton Musatov, Chief Executive Officer of VTB Factoring, “The new commercial debt financing technology makes it much easier for Russian businesses to access capital to solve operational problems. In contrast to the standard factoring procedure, the client does not need to conclude a service contract for the assignment of commercial debt. It is enough for the issuer to issue a DFA on a digital platform and the factor’s consent to purchase it”

Overall, the transaction process introduced simplicity, transparency, and lower costs in the factoring process, one that may serve as a yardstick for other major players.

Realizing the Power of Blockchain Technology

Russia had a plan to ban digital currency activities at the beginning of the year as it sought to trail the path of China which banned crypto activities last year.

The ongoing war in Ukraine has made the Central Bank of Russia and key ministries to now have a divergent disposition toward the Digital Financial Assets and the technology powering them. 

The recorded CFA transaction milestone featuring VTB Factoring and Lighthouse may form another strong base for the Russian government to become more docile and look toward the inherent benefits the economy stands to gain by regulating these nascent asset classes.