A senior official at Russia’s Central Bank insists the so called initial coin offerings (ICOs) could drive funding opportunities for startups, which is why the regulator is ready support the development of the blockchain funding model.
“Our country has a tremendous potential of innovations, our students, young people and entrepreneurs have the edge over any country in the world from the viewpoint of ideas, and amid the lack of classical institutions of startups support, ICO development has a huge potential to finance those ideas,” Bank of Russia first deputy chairman Sergei Shvetsov said Tuesday.
Though this is an obviously challenging task, Shvetsov is optimistic:
“Hopefully, ICO will take a rightful place on Russia’s financial market,” he said.
He also noted that, unlike fundraising with securities, this method is based on some sort of an ‘honorable agreement’, or so-called soft promise.
“We have to create a regulatory framework that wouldn’t kill the basis of entrepreneurship but at the same time would protect investors from obvious fraud and the abuse of the opportunity to raise funds which can in fact be spent on something else,” added Mr. Shvetsov.
Notably, as early as this October, Mr. Shvetsov voiced quite a different opinion regarding the ICO mode claiming it cannot be viewed as an investment. Calling ICOs ‘game’, he also advised Russians to invest only in legally protected assets.
At the same time the Central Bank of Russia asked to ban websites that enable cryptocurrency trading.
In September, a working group was formed within the State Duma’s (lower house of parliament) Financial Market Committee to develop proposals on legalization of cryptocurrencies in Russia.
Chairman of Russia’s Central Bank Elvira Nabiullina has repeatedly stressed that the stance of the regulator in relation to cryptocurrencies is unchanged, as it does not support their legalization as a legitimate payment facility, but sees the prospects for the blockchain technology. She also said that cryptocurrencies would not be admitted to the Russian market being ‘quasi-money’.