Investment Attraction Strategies: Russian Firms Leverage Belarus as Intermediary
Rising Interest in Belarusian Markets for Cost-Effective Financing
In pursuit of more affordable borrowing options, businesses are increasingly turning to digital bonds, or debt tokens, whose issuance in Belarus presents a novel avenue for Russian issuers and investors.
Soaring Costs of Traditional Borrowing
With the Russian Central Bank maintaining a high key interest rate, private companies are forced to issue bonds at steep annual rates of 30% and above. These exorbitant costs encroach on profits and threaten business viability. A viable alternative has unexpectedly materialized in Belarus.
Debt Tokens vs Moscow Stock Exchange
A case in point is the company "Royal Capital," which issued debt tokens (similar to CFTAs) on the Belarusian Finstore platform for an Annual Percentage Rate (APR) of 25%, significantly more profitable than attracting investments through the Moscow Stock Exchange, where a recent bond issue required an APR of 31%.
To date, Finstore.by has attracted around $250 million in investments for companies from Belarus, Russia, and Kazakhstan. Tokens are issued in four currencies, sparing investors from loss due to exchange rate fluctuations.
Understanding Belarusian Debt Tokens
tokens are digital representations of debt obligations, commonly issued on blockchain platforms. Their transparency, security, accessibility, flexibility, and efficiency make them attractive alternatives to traditional financing methods.
A Promising Future for Belarusian Debt Tokens
Initially issuing tokens worth 1 million BYN (approximately 26.5 million RUB), Finstore is currently in negotiations with several more Russian issuers. The potential expansion of these platforms could offer businesses more favorable rates and fewer intermediaries, making digital bonds an enticing tool in the face of high traditional borrowing costs.
As more Russian issuers join the Belarusian market, the landscape of financing could undergo a significant shift, providing businesses with a less expensive and more accessible means of borrowing. This shift responds to the urgent need for alternative financing sources in the current economic climate.
Personal-finance concerns of businesses in Russia are being addressed as they explore novel avenues for cost-effective financing, such as debt tokens issued on Belarusian platforms like Finstore. By investing in digital bonds, businesses can secure funding with annual percentage rates (APR) that are more favorable compared to traditional options like the Moscow Stock Exchange.
