In the most recent iteration of our digital currencies series with Baker McKenzie we are looking into the rising popularity of Initial Coin Offerings – a means for blockchain start-ups to raise capital.
For those interested in cryptocurrencies and distributed ledger technology ICOs are one of the hottest trends of 2017. According to the latest estimates around US$1.3bn have been raised in ICOs since the beginning of 2017.
But we also warned that ICOs are “not for the faint-hearted“: while they can offer huge returns to investors they are also risky.
ICOs take place in a largely unregulated environment and a discussion is taking place whether this needs to change. More regulation would presumably reduce the risks, but quite possibly also the returns.
We were wondering how experts think about regulating ICOs and turned to banking, cryptocurrency, fintech and blockchain experts in the Euromoney Thought Leaders Panel to find out.
It turns out that a majority of respondents to the poll favours regulation, while about one third do not consider it to be necessary. Those opposing regulation do so for different reasons though: 15% argue that more regulation would reduce investor returns, while 21% think regulating ICOs would be a waste of time because they won’t be around for long anyway.
The poll “highlights the maturing of the digital currencies business, with its early adopters increasingly outnumbered by financial traditionalists with mainstream regulatory concerns around fraud and consumer protection,” writes my colleague Solomon Teague in his comprehensive analysis of the survey.
This is part six in of our series on digital currencies that we are publishing in collaboration with law firm Baker McKenzie. To catch up with all articles, infographics and interviews published earlier in the series, please head over to the Baker McKenzie financial institutions content hub.