Russia’s Top Bank to Test State ICO Platform

Sberbank and the state depository have joined forces to assess specific ICO features and try to reduce risks and improve the crowdfunding process

by Marin Marinov
25 May • 2 min
In News

Russia’s state-run lender Sberbank said on Thursday it will test blockchain-based Initial Coin Offering (ICO) technology on the country's central bank regulatory platform. The trial involves Level One, a Moscow-based organiser of commercial lectures, as the issuer of the tokens, Russia's largest bank said in a statement.

The project will be carried out by the lender's corporate and investment arm, Sberbank CIB, and the National Settlement Depository (NSD), which is owned by the main exchange in the country, the Moscow Exchange.

The pilot aims to analyze various issues related to the ICO mechanism that could help for minimizing risks for investors, as well as to get feedback from the Bank of Russia, the country’s central bank, on how to improve the ICO process.

“Sberbank CIB believes that the Russian ICO market is very promising. Many of our clients have shown an interest in this method of financing and we intend to actively promote this service by driving the institutionalization and popularization of ICOs after the corresponding legislation is passed,” Igor Bulantsev, senior vice president of Sberbank and head of Sberbank CIB, said in a statement.

The tokens created during the ICO process will be officially registered, with the first transaction planned for the end of this summer. Sberbank CIB will act as organizer and chief investor, and the NSD will be the custodian for Level One's ICO.

“Our end goal is to create the foundations for developing Russia’s digital economy and bringing about a new class of assets for investors, as well as ecosystems for ICOs and trading of digital assets on the secondary market,” Eddie Astanin, chairman of the executive board of the National Settlement Depository, said in the press release.

Russia and crypto world

In April, the Bank of Russia launched an ICO regulatory platform for testing this type of crowdfunding and analyzing the need of change to the regulations or the introduction of new measures. Also in April, the Ministry of Telecom and Mass Communications (MinComSvyaz) put on public discussion guidelines for issuing digital tokens during an ICO, including obligatory registration, minimal capital of USD 1.7 million and an ICO-issuer accreditation for five years.

ICOs have become popular in the country, with Russian individuals and companies investing USD 300 million in ICOs in 2017. However, half of them turned out to be fraud schemes, according to the Russian Association of Cryptocurrency and Blockchain (RACIB).

Earlier this week, Russia’s Parliament, the State Duma, approved the first reading of new crypto laws that aim to protect investors in the largely unregulated digital environment.