By: Cameron Bowen, 11 September 2018

Russia’s ICO Trial is a Success |

According to a minister from the central bank of Russia, the bank has performed a successful ICO in a controlled setting. The “sandbox ICO” may be tied to future cryptocurrency exploration by Russia’s central bank, one which has expressed interest in a state-sponsored digital currency since Bitcoin’s early days. The ICO is likely related to a Russian firm called LevelOne, who were to have completed ICO testing by the end of the summer.

The announcement was made at the Eastern Economic Forum. This meeting of government minds is meant to foster collaboration between Russia and other Asia nations like China and Japan. The revelation took place during a seminar called “The Far East as a Financial and Offshore Centre”.

China was notably present for the discussions. China’s now famous ICO ban has strictly limited blockchain development within its borders, but this is not to say that China is against blockchain technology in principle. China has constantly explored avenues by which cryptocurrency might be exploited for the good of the state, and Bitcoin remains a popular asset among Chinese citizens (though its trade is usually illegal). China is home to the world’s largest Bitcoin mining organizations, and some say it has an undue influence over the evolution of cryptocurrency.

The Russian delegate expressed derision about Bitcoin, calling it a “pyramid scheme" that “wastes electricity in vain”. China has been known to voice similar opinions about the world’s largest digital currency, though some believe this scorn is due to China’s inability to fully regulate Bitcoin.

The same is likely true of Russia. No less than Vladimir Putin himself has forbade the proliferation of cryptocurrency trading and technology. Citing cryptocurrency’s decentralized nature, Putin has put a halt to the release of state-issued digital currencies, as well as state-facing ICOs.

These conversations are likely far ahead of any resolution in Russia/China’s regulatory approach to cryptocurrency and ICOs. It’s clear that neither power wishes for funds to be raised through these channels - likely because of the lack of control the government could have over these burgeoning companies, and the investor hazards that have become typical of western ICO culture.

On the other hand, it’s not certain that a state-issued cryptocurrency would be successful for either nation. Blockchains like Ethereum are already used against Chinese censors, and both nations have seen citizens sneak wealth out of the country through Bitcoin and other decentralized currencies. But as long as Russia and China fail to act, blockchain continues to progress unabated elsewhere.

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