Entrepreneurs and start-ups using the ICO model for fundraising received a welcome boost this week as one of the top figures from the Russian central bank put his weight behind initial coin offerings.
Sergey Shvetsov, who is the bank’s first deputy governor, spoke of the ‘massive potential’ which ICOs offer and he pledged that the Bank of Russia is committed in supporting the development of fundraising campaigns using ICOs in Russia.
Mr Shvetsov went on to speak about the potential wealth of innovations in Russia. The country’s students and young entrepreneurs are among the finest in the world he stressed, yet Russia does not have traditional or established institutions in place to promote, develop and support start-up companies’ ideas. Using the ICO model can change that and it will provide the finances to support those ideas so they can become a reality.
These comments are in sharp contrast to the official message where the Bank of Russia urged the public to approach ICOs with caution, stating there were ‘risks’ involved when it came to investing in ICOs and crypto currencies.
The change of opinion could have something to do with the official Kremlin papers that were published in late October. These revealed President Vladimir Putin gave his personal approval to implement a framework in order to regulate and control ICOs and mining of crypto currencies in Russia.
Although Mr Shvetsov did not draw upon the framework being developed to support ICOs, he did say that he hopes future ICOs will have a true and rightful place in the country’s financial markets. This comment is the complete opposite to his words 3 months ago when he insisted that Russia will not allow Bitcoin exchanges to operate in the country as the risk factor is ‘unreasonably high’ due to the currency’s volatile price.