Representatives of Russia-based payment services provider Qiwi have created the first crypto investment bank in the Russian market.
The project, to be known as HASH, will provide assessment, search and market entry projects, attributes typical of investment banking firms designed to appeal to large investors, according to Kommeresant. HASH will not operate as a Qiwi Group subsidiary. Qiwi Blockchain Technologies (QBT) will serve as HASH’s technology contractor as HASH establishes its token’s purpose, how it will be used and how it will work.
The entry of traditional investment banks into the digital asset market is expected to drive the growth of this high-risk market in relation to its volume. The evolution of the legislative base will also support the market’s growth, experts believe.
Following the ICO, which is under preparation, HASH will attract interest from international funds that focus on investing in digital assets. HASH is currently working with 10 such funds, including one with around $100 million.
QBT financial director Yakov Barinsky, who serves a HASH’s project manager, said Qiwi Group’s main shareholder and general director, Sergey Solonin, is interested in the crypto initiative.
Solonin told Kommersant he is interested in participating in the project as a strategic investor, but he intends to make a decision after observing the project’s development.
Barinsky said the project will receive its commission after a company raises funds in the market, a classic investment banking service monetization model being used in the digital assets market.
The digital asset market’s speculative nature and its lack of long money reflect the lack of understanding of the costs involved. The project has postponed securing a trading license for the next year, Barinsky said.
ICOs with Russian participation accounted for 60% to 80% of placements, according to data. Since the start of the year, 530 ICOs have been undertaken, drawing $11.9 billion, according to Coinschedule, largest being Telegram’s $1.7 billion ICO.
Also read: Russian Crypto Firm Qiwi is working on a blockchain energy project in Crimea
Traditional investment banking observers were reserved about the project.
VTB Group, a Russia based global provider of financial services comprised of more than 20 credit institutions and financial companies, believes traditional investment banks’ interest in digital assets will increase in relation to the legislative base’s improvement in the sector.
Blockchain technology, however, is suited for both traditional corporate banking and investment banking, according to the VTB Group press service. An investment banker who wanted to remain anonymous said the cryptocurrency market differs from classical products for attracting capital.
The investment banker said HASH is close to early-stage capital raising or venture capital, and that the classical and crypto niches “intersect a little.”
Sources told Kommersant that the risk of investing in a fraudulent ICO is too high, even when the investment consultant does not intend to deceive the investor. The risk exists that the investor could lose funds and the consultant could face civil liability for improperly fulfilling his obligations. It will be difficult to prove, however, that the consultant is to blame for the loss of funds since the investment contracts include a warning that investing in digital assets carries a high risk.
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