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UKRAINE IS EXPECTED TO HOLD THE WORLD’S FIRST PUBLIC ICO FOR CONSTRUCTION OF BROADBAND ACCESS NETWORK. ARTEM AFIAN

The officials have been considering the possibility of holding a public ICO for construction of a nationwide network of broadband access to the Internet. The idea was proposed at a meeting chaired by the Prime Minister of Ukraine Volodymyr Groysman last Friday.

The Deputy Head of the State Agency for E-government Alexey Vyskub announced it on his Facebook page, InternetUA reports.

– Last weeks we have been actively working on a National Plan for the development of broadband access to the Internet. The goal, main challenges and prospects are clear to everybody, I will not talk about it. The key objective is to find funds for such a large and complicated project. And now at the last meeting, chaired by the Prime Minister of Ukraine, a very innovative and even revolutionary idea was proposed, that is to hold public state ICO to raise funds for the construction of broadband access to Internet in Ukraine, as Vyskub wrote. “How do you like the idea of the first public ICO in the world?”

As it was explained to our periodical in the National Agency for E-government, the meeting for the establishment of broadband access Internet in Ukraine was held on March 30, and the idea of ICO has been considered as one of the options of this project’s implementation, alongside with private and public cooperation.

ICO (Initial Coin Offering) is an analogue of the initial public stock placement, which is used in the cryptocurrency community and means the initial placement of coins. The companies, which have decided to raise capital in this manner, issue digital tokens instead of stock. Further investors will be able to use acquired tokens in the following ways: either to pay for services inside the platform on more favourable terms, or, when the price for these tokens increases, go to the exchange and trade them for other cryptocurrencies or fiat money, taking a profit gained. Since ICO is dealing with tokens issue, the project conducting such a campaign should operate on blockchain technology.

According to scheme, published by Alexey Viskub, in the case with attracting investments through public ICO it is proposed to create a budgetary institution that will be in charge for this, further a project of Ukrainian broadband coverage should be drafted, with consideration of ICO features and investments, to carry out cryptotokens’ issue and ICO – cryptotokens’ sale, and implement the project at the expense of attracted investment.

An expert in IT-law field, the attorney, the Juscutum’s managing partner Artem Afian called this idea “unexpected” and “challenging”:

17353179_1300765166637268_363130207226576677_nAn announcement of holding the first state ICO in Ukraine can be called quite venturous. It is somewhat unexpected for Ukraine. Taking into account the global trend, I believe that now comes the second wave of ICO and major players will be conducting similar projects. The project being implemented in Venezuela was only the first tentative move. Of course, it should be perceived in terms of a particular country. But state ICO format is a harbinger of those tools, which the government will be able to use to change the format of relations with its citizens.

If we talk about Ukraine, having considered available information, it is so far difficult to say something about its implementation, the expert says, however, this format is generally feasible even without new legislation:

We need correct application of classical legal mechanisms and, possibly, a number of new regulatory legal acts and clarifications. Who knows, maybe it is quite possible that in Ukraine a large-scale national ISO will be carried out. “We should examine this project in every detail”, said the Juscutum’s managing partner.