Initial Country Offerings – Who is getting on board?

ICOs are on the rise. No, not the ICOs that drove the hype frenzy of 2017. We're talking about Initial Country Offerings, a term coined by a CoinShares report this week

Digital asset management company CoinShares released a report this week on the biggest crypto trends in 2019.

The report was compiled with the help of many research aggregators and entities in the industry and highlights many salient points.

From the strengthening push for institutional investment to the explosive growth of derivatives and crypto lending, there are many observations in the 134-page-long report. However, one really interesting point the report touches on is the growth in ICOs.

No, not the mania-hyped token offerings of 2017 and 2018, but countries starting their own coins – Initial Country Offerings.

Is this marking a clear trend as we move into a new year? And who is getting on board? Let’s take a closer look.


Venezuela kicked off the Initial Country Offerings trend when President Maduro announced the creation of the Petro in December 2017. Supposedly backed by oil reserves, there’s no way to physically check that the corresponding natural resources are actually there.

Later on, in 2018, Maduro announced the Petro Gold, which would be backed supposedly by the country’s depleting gold reserves. Criticised as a tool to circumvent US sanctions, it’s hard to find real, raw details on the Petro.

Most things about the Petro are decidedly murky. Moreover, there isn’t much of a ‘cryptocurrency’ element in a token in which you have to trust the government. According to Maduro, the presale generated $735 million. At the end of last year, the Venezuelan government began paying pensions in Petro tokens.

Unsurprisingly, there was a fair amount of confusion from the people about the value of the Petro and how to convert it into the national fiat currency. It’s all been rather quiet on the Petro front since then, leading CoinShares to conclude that it’s unclear whether the Petro is actually in use, traded, or available.

However, according to a Chinese news source, Maduro announced last week that two official government bodies would be receiving payment in Petro tokens for documentation fees, passports, licenses, and more. This includes notary and registry services and immigration services. The Petro, it seems, is indeed still alive and well.

Without an ounce of transparency attached to it, the Petro may not be the best example of a state-backed cryptocurrency at its best. However, it does show a country speaking about – and using – cryptocurrencies at the highest level and a population well-versed in this nascent technology.

The Marshall Islands

The Marshall Islands cryptocurrency SOV is nothing like the Petro and will even have in-built tools to control the privacy of people’s payments. Also unlike the Petro, the details of SOV are far more widely available.

It will be launched on the SOV blockchain. 24 million SOV will be released initially and then it will use a mathematical algorithm to set the inflation rate at 4%.

SOV is unique in many ways, not least because the Marshall Islands doesn’t have its own currency but uses the US dollar. As such, it will be the first country to use a cryptocurrency as its only form of legal tender.

Not only will 10% of its proceeds be returned to Marshallese citizens every year, but SOV will allow the dispersed island nation hampered by climate crises and rising tide levels to preserve its people’s identity forever on the blockchain, in the event that they are forced to evacuate their physical shores.


Thanks to Facebook’s efforts with launching Libra, China has now accelerated its plan to digitise the RMB. The People’s Bank of China had, in fact, started a cryptocurrency research group as far back as 2014, and discussions had begun about a state-backed digital coin.

However, the Bitcoin speculative bubble in 2017 led China to crack down on cryptocurrencies and ban trading and exchanges in the country. The plans for its own ‘cryptocurrency’ seemed to have cooled off until recently when Libra was announced.

Most people are divided about what the whole Chinese blockchain initiative involves. It’s clear that using blockchain technology and switching from cash to digital payments will give the government a lot more control over its citizens’ payments. As the CoinShares report points out, “get ready for surveillance money and soon”.

However, other people in the industry, such as the co-founder of the first Chinese cryptocurrency exchange and Ballet hardware wallet creator Bobby Lee, believe that it is still positive for the space. He says that it will get people used to using the technology and eventually bring their eyes over to Bitcoin.

The trend of Initial Country Offerings is clear

CoinShares concludes that “the race is on”, and it seems as if more and more countries will scramble to digitise their currencies in a bid to avoid Chinese domination – or at least compete on the same level.

Many countries have either expressed an interest or experimented with their own digital coins, but largely without success… so far.

Estcoin (Estonia’s proposal for a national cryptocurrency) was quickly shut down by the EU. Iran’s Paymon was short-lived since it failed to find any takers for it and was clearly a device to get around US sanctions. While details are still unclear on TurkCoin, apparently the Turkish government plans to proceed with it in 2020.

Facebook may not be the most trustworthy source to handle people’s payments, but it certainly has an extensive global reach.

But with regulators seemingly vehemently against Libra, it will be interesting to see how the US reacts to China’s advances – and whether we can expect to see a new ‘FedCoin’ any time soon.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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