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Russia’s Central Bank: ICO Pilot a Success, Legal Hurdles Remain

Last Updated March 4, 2021 3:39 PM
Samburaj Das
Last Updated March 4, 2021 3:39 PM

A regulatory platform operated by the Bank of Russia has concluded an initial coin offering (ICO) pilot, a central bank official has revealed.

Speaking at the Eastern Economic Forum in Vladivostok – a port city near the Chinese border –Ivan Semagin, deputy director of financial markets development at the Bank of Russia revealed the authority’s sandbox ICO experiment proved a success following its original announcement in May.

Speaking to Russian news agency TASS , the central bank official said in roughly translated statements:

“In the framework of Bank of Russia’s ‘sandbox, an experiment was recently carried out to conduct an ICO…technically everything went well, but there were a lot of issues from a legal point of view.”

The official did not elaborate on these legal concerns.

As reported previously, the central bank was working with Russia’s largest retail bank, Sberbank, and the National Settlement Depository to test the issuance of an initial coin offering in a central bank-operated platform. Launched in April this year, the platform is part of a sandbox developed and operated by the central bank to encourage pilots of new financial products and services without the burden of regulation.

The tokens were registered, transacted and settled on the NSD’s infrastructure, the same core tech used by Russia’s stock exchanges. The NSD served as the custodian while Sberbank CIB, the corporate and investment banking arm of the banking giant, participated as the chief investor in the coin offering of Level One – a Moscow-based commercial lecture website.

Having already purchased ₽750 million in commercial bonds over a blockchain from Russian telecom giant MTS this year, Sberbank CIB chief Igor Bulantseve said the bank had seen plenty of fundraising interest through ICOs among its clients.

“Sberbank CIB considers the Russian ICO market to be very promising,” the chief executive said at the time. “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.”

Bank of Russia image from Shutterstock.