Russia and Belarus have conducted their first cross-border transactions using digital financial assets (DFAs) in an effort to avoid the increasingly effective US financial sanctions.

Russia was facing growing problems settling international trade deals in 2024 as the US Office of Foreign Assets Control (OFAC) threatened individual banks with secondary sanctions for conducting business with Russian banks. That caused many of Russia’s partners to cut off banking relations, resulting in mounting payment problems.

Anatoly Aksakov, chair of the Russian State Duma’s Committee on Financial Markets, heralded the milestone, forecasting a “breakthrough” in the DFA market in 2025, particularly in facilitating international transactions, Belarus in Focus reports.

Aksakov emphasised that the growth of the DFA sector has the potential to drive structural reforms in the Russian economy while bolstering investments in key industries. The transactions come after the Central Bank of Russia (CBR) launched its digital ruble in August and conducted its first tests of the system, reversing years of scepticism over cryptocurrencies.

A digital international payment platform was also a centrepiece at the BRICS summit in Kazakh in September, when Russian President Vladimir Putin showcased the “BRICS Pay” digital money, which is already used to settle BRICS agricultural deals.

Russia’s DFA law, enacted in 2021, granted the CBR oversight over such transactions. By 2022, companies began issuing digital assets in the form of tokenised rights enabling holders to claim obligations from issuers in monetary terms or securities. A pivotal moment arrived in March 2024, when Putin signed legislation permitting DFAs, utility digital rights and hybrid digital rights for international use.

Under Russian law, DFAs represent blockchain-recorded rights rather than cryptocurrencies, which are neither recognised as legal tender nor intended as substitutes for traditional payment systems in Russia. The Belarusian counterpart, referred to as tokens, are similarly classified, often representing monetary claims, securities, or equity in private companies.

Russia’s domestic issuance of DFAs has surged, with 470 issuances in the first nine months of 2024 valued at approximately RUB 316bn ($3.3bn). Projections suggest this figure could exceed RUB 500bn by year-end and potentially approach RUB 1tn in 2025, according to RBC.

Russian Finance Minister Anton Siluanov has sung the praises of DFAs in international settlements, citing lower costs, faster processing times and enhanced reliability.

“These instruments are better suited for international transactions than cryptocurrencies,” he said as cited by Belarus in Focus, reflecting the government’s strategic pivot towards digital financial technologies as a solution to what has become a major headache.