Russia-based payment services provider Qiwi has created Russia’s first crypto investment bank.
The project, called HASH, will provide assessment, search and market entry projects. These features, typical of investment banking firms, are designed for large investors.
HASH will not operate as a Qiwi Group subsidiary. Instead, Qiwi Blockchain Technologies (QBT) will serve as HASH’s technology contractor while HASH establishes how its token will be used and how it will work.
The growth of this high-risk, high-yield market is expected to be driven by the entry of traditional investment banks into the digital asset market. Experts also believe that regulation will also support the market’s growth.
Following its ICO, which is being prepared, HASH is expected to attract interest from international funds that focus on investing in digital assets. HASH is currently working with 10 such funds, one of which is worth $100 million.
HASH’s project manager, QBT financial director Yakov Barinsky, said Qiwi Group’s main shareholder and general director, Sergey Solonin, is very interested in the crypto initiative.
Solonin has said he is interested in participating in the project as a strategic investor, but he intends to make a final decision after having had an opportunity to observe the project’s development.
Barinsky added that the speculative nature of the digital asset market as well as its lack of long money reflect the lack of understanding of the costs involved, and these costs have led the project to postpone securing a trading license for the next year.
Traditional investment banking observers are reserved about the project. Traditional investment banks’ interest in digital assets will increase in relation to regulation, according to VTB Group, a Russian-based global provider of financial services that is comprised of more than 20 financial institutions.
According to VTB Group’s press service, blockchain technology is well-suited for both traditional corporate banking and investment banking. An investment banker who wished to remain anonymous has said that the cryptocurrency market differs from classical products for attracting capital.
The anonymous investment banker said HASH is close to early-stage capital raising and that the classical and crypto niches “intersect a little.”
For most institutional investors, the risk of investing in a fraudulent ICO is just too high, even when the investment consultant does not intend to deceive the investor. The risk for QBT (or HASH) is that the investor could lose funds QBT could face civil liability for improperly fulfilling its obligations as a consultant. Proving that the consultant is to blame for loss would be difficult to prove, however, since its investment contracts include a warning about the high risks associated with investing in digital assets.