Russia has successfully completed the first sandbox trial of an initial coin offering (ICO) blockchain system, a central bank official says.

“In the framework of the ‘sandbox’ of the Bank of Russia, an experiment was recently carried out to conduct ICO on the basis of the existing infrastructure,” states Bank of Russia Deputy Director of the Financial Market Development Ivan Semagin. “Technically, everything went well, but there were a lot of issues from a legal point of view.” He gave no further explanation regarding these issues.

Russian bank Sberbank began testing its blockchain-powered system for ICOs in the central bank’s sandbox.

Securities blockchain trading platform

The system has been dubbed the National Settlement Depository (NSD), which is currently being used to host conventional securities trading. “The first coin-based transaction is to take place by late summer 2018,” Sberbank says.

“Coins will be registered and settlements will be performed using the NSD’s financial market infrastructure,” the bank explains. “Sberbank CIB will act as the organiser and chief investor in Level One’s ICO. The NSD will act as the custodian of the transaction and will register, store and maintain a record of the digital assets.”

The FinTech experts at the NSD were expecting the test would provide them with assessment of the “specific features of working on such transactions; minimise related risks; get feedback from the Bank of Russia regarding improving the mechanism for carrying out ICOs: make Russian ICOs more transparent for traditional investors, and ensure that these transactions are organised well.”

Regulation needs to be completed

After completion of the test, Sberbank said that now regulation needs to be finalised. According to official sources, the new laws on governing digital financial assets and blockchain investment platforms are expected to be ready by the end of this year.

“Many of our clients have shown an interest in this method of financing and we intend to actively promote this service by driving the institutionalisation and popularisation of ICOs after the corresponding legislation is passed,” Sberbank concludes.