The Russian Central Bank has conducted a “successful” trial of an Initial Coin Offering (ICO), this was revealed by an official of the reserve bank in a report published by a local media outlet TASS on Tuesday, September 11, 2018.
The deputy director of the Financial Market Development Department for the Bank of Russia, Ivan Semagin, reportedly stated that;
“Within a framework of the central bank’s sandbox, we conducted an experimental ICO on the basis of our existing infrastructure. Technically it was a success, but we still have a lot of legal issues”.
The ‘Successful’ ICO Experiment
It was also stated that Sberbank and the National Settlement Depository have concluded plans to launch an ICO experiment which is to be issued by LevelOne, a Moscow-based commercial hall firm by the end of this summer.
Ivan Semagin revealed the information surrounding the “Successful” trial during an annual event, Eastern Economic Forum (EEF), an event targeted at the interaction and progressive collaboration between the Russian Far East and the Asia-Pacific Region that are participants in “The Far East as a Financial and Offshore Centre” discussion.
The Eastern Economic Forum was attended by both Russian and Chinese officials, and journalists, the subject of discussion was centered on cryptocurrencies and ICOs. The CEO of the Far East and Baikal Region Development Fund, Alexey Chekunkov, was of the opinion that an ICO is a “useful technology” with the potential of generating considerable revenue for the state.
Alexey Chekunkov went further, citing leading counties such as US and Singapore as a model for countries with feasible and reasonable legal framework for cryptocurrencies, however he seems not be fascinated by the idea of cryptocurrencies, expressing his uncertainty about Bitcoin (BTC) which he referred to as; “harmful pyramid scheme that wastes a lot of electricity in vain.”
Russian Central Bank’s Previous Shot at ICO
This trial is not the Russian Central Bank’s first shot ICO as it has been previously reported that the reserve bank has partnered with Russia’s largest retail bank, Sberbank and the National Settlement Depository in order to test an ICO in the central bank-based platform.
The platform was launched in April 2018 as a part of sandbox developed and administered by the reserve bank to incentivize initiators of new financial services and product without undue regulatory burden.
The tokens which were registered, transacted and settled on the NSP platform which is the same platform used by Russia’s Stock Exchange. The arrangement is that the NSD will serve as the token custodian while the Sberbank CIB serves as the chief investors in the coin offering of Level One.
Sberbank CIB chief Igor Bulantseve stated that the bank had seen plenty of fundraising interest through ICOs among its users having made purchase of ₽750 million in commercial bonds over a blockchain from Russian telecom giant MTS this year, the chief stated that; “Sberbank CIB considers the Russian ICO market to be very promising,” he then went further saying;
“Many Sberbank clients are interested in this type of investment, and we plan to promote this service proactively once the appropriate legislative framework comes into effect; we will be one of the drivers to institutionalize and popularize this type of transaction.”
Russia’s Regulatory Skepticism
Despite several attempts and advancement in the blockchain technology, it is crystal clear that the Russian government is still uncertain about the cryptocurrencies, some top officials have expressed their skepticism about cryptocurrencies, ICOs, and even the blockchain, this can be described as “regulatory skepticism”
Earlier in September, it was reported that Dmitry Peskov, the president’s special representative on digital and technological development stated that the country is yet to make its decision as regards cryptocurrencies and its issuance. Also, President Vladimir Putin reportedly said that Russia could not have a state-backed cryptocurrency as it would defeat the purpose of the cryptocurrency itself which is decentralization.