Central Bank Official: Token Offerings Have 'Huge Potential' in Russia

The Russian Central Bank’s First Deputy Chairman Sergei Shvetsov hopes to see token offerings, also known as initial coin offerings (ICOs), integrated into the Federation’s financial landscape, according to a report by state-run media outlet Tass.

Stating the bank’s support for the use of the fundraising mechanism, Shvetsov said, “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.”

“Hopefully,” he continued, “ICO will take a rightful place on Russia’s financial market,” though the road to such a future may be lined with challenges. The Tass article did not elaborate on the nature of these difficulties, but Shvetsov may have been referring to President Vladimir Putin’s call for measures that would regulate token offerings in much the same way that existing laws currently govern the administration of initial public offerings.

While the Chairperson of the Central Bank, Elvira Nabiullina, has spoken out against the use of cryptocurrencies as a means of payment, she has also expressed interest in other blockchain use cases. Shvetsov’s call to eventually deploy the technology as a fundraising mechanism is ostensibly in keeping with this stance.

In addition to seeking proposals for token offering and cryptocurrency mining regulations, Putin requested recommendations on “the formation of a single payment space for the member states of the Eurasian Economic Union” that would integrate “new financial technologies,” including distributed ledger technology.

In other recent developments in the Russian cryptosphere, the country’s National Settlement Depository is designing a blockchain-based cryptocurrency vault that may double as a bank for digital assets.

On October 14, less than a full week after Finance Minister Anton Siluanov announced that the government would control the issuance and circulation of cryptocurrencies in the nation, Communications and Mass Media Minister Nikolai Nikiforov revealed a decision by Putin to issue a national cryptocurrency, the “cryptoruble.” Earlier that month, Siluanov had stated in an interview that his government intends to educate Russians on cryptocurrencies, particularly on the risks associated with investing in them. On September 8, 2017, he told reporters that Moscow plans to regulate cryptocurrencies like securities, adding that his ministry would “draw up a bill by the end of the year.”