Blockchain ICO

Russia to Pilot ICO Technology as Investors Want Digital Tokens

Ricardo Esteves | May 25, 2018 | 9:00 pm
Blockchain
Blockchain

Russia to Pilot ICO Technology as Investors Want Digital Tokens

Ricardo Esteves | May 25, 2018 | 9:00 pm

Russia is about to test an initial coin offering (ICO) technology at its central bank’s regulatory platform, which was launched in April 2018 to pilot unregulated technologies.

The project aims to conduct the first transaction involving tokenized assets and assess the specifics of these transactions, mitigate associated risks, and get feedback from the Bank of Russia.

Russia Tests Initial Coin Offering at Central Bank

Sberbank CIB, the corporate and investment banking business of Russia’s state-owned bank, and National Settlement Depository (NSD), Russia’s financial market infrastructure, have announced they will soon be piloting ICO technology at the Bank of Russia’s regulatory platform. It’s expected that this will conduct the first digital asset transaction by the end of the summer.

NSD, Russia’s central securities depository, will record tokens and carry out settlements related to their issue and circulation as well as be the transaction’s custodian by keeping and registering the assets. Sberbank CIB will coordinate the issuance and be the anchor investor in tokens issued.

Once Sberbank CIB and NSD are able to assess the blockchain transaction and get feedback from the central bank regarding the transaction mechanisms, the bank will be able to bring more transparent ICO to the Russian market, which can bolster adherence from traditional investors and make such transactions more mainstream.

Russia’s Federal Assembly, the State’s Duma, has passed two bills: ‘On Digital Financial Assets’ and ‘On Attracting Investments via Investment Platforms.’ These will enable Sberbank CIB and the central securities depository to scale this blockchain pilot and enlarge the issuance of digital tokens to a wider circle of clients. The bank has found great demand for digital tokens, according to Igor Bulantsev, Senior Vice President of Sberbank and Head of Sberbank CIB.

“Sberbank CIB considers the Russian ICO market to be very promising. 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.”

Eddie Astanin, Chair of the Executive Board of Russia’s central securities depository, is leading his team to create the necessary infrastructure to record digital tokens.

“Our end goal is to create the fundamental basis for the development of the digital economy in our country, for the emergence of a new type of asset for investors, for ICO ecosystems, and for the circulation of digital assets on the secondary market. In conjunction with market leaders, we are implementing a project to create an infrastructure to record digital assets. The existence of this infrastructure is a crucial condition based on which institutional investors come to our market, the market develops rapidly, and its capitalization grows.”

In March, the Russian Parliament passed a draft bill saying that digital tokens are to be considered as assets, but not money. They can, however, be converted into fiat currency only through licensed exchanges of digital financial assets and existing trading platforms.

Featured image from Shutterstock.
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  • Jared Odulio

    It’s already piloted in the Philippines by Tamadcoin

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