Russian banking giant Sberbank and the country’s National Settlement Depository will test an initial coin offering on a central bank regulatory platform.
Sberbank and the National Settlement Depository (NSD), Russia biggest bank and the securities depository respectively, will test the issuance of an initial coin offering (ICO) on a regulatory platform established by the Bank of Russia, the country’s central bank. Launched in April, the regulatory platform was developed by the central bank to conduct test pilots of new financial services and technologies that required legislative changes before any implementation.
According to an announcement by Sberbank CIB, the corporate and investment banking arm of Sberbank, the issuer of the ICO will be Moscow-based Level One, a popular commercial lecture website.
The coin offering will occur in late summer 2018 with tokens registered and settled on the NSD’s financial market infrastructure, used by traditional stock exchanges. Sberbank says it “will act as the organizer and chief investor in Level One’s ICO”. The NSD will serve as the custodian and, in addition to safeguarding the digital assets, will also maintain a record of transactions settled.
The two financial institutions claim the pilot will enable them to mitigate any associated risks and gain feedback from the central bank while assessing the performance of an ICO which provides transparency to reduce risks for investors.
“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,” NSD chairman Eddie Astanin stated. “In conjunction with market leaders, we are implementing a project to create infrastructure to record digital assets.”
The noteworthy pilot comes at a time when Russian companies are professing an active interest in fundraising possibilties through initial coin offerings, according to Sberbank CIB chief Igor Bulantseve.
The Sberbank executive, who is also the senior vice president of the banking group, said:
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.
As reported this week, Sberbank CIB notably purchased commercial bonds from telecom giant MTS over a blockchain, the first transaction of its kind in Russia. Russia’s NDS has also implemented blockchain technology for e-proxy voting as early as 2016.
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