Initial Coin Offerings (ICOs) became a notable application of the blockchain technology in the finance world, emerging as an innovative method for fundraising, namely for startups and small and medium-sized companies.
The ICOs potential is recognized by many.
As the Organization for Economic Cooperation and Development (OECD), that acknowledged their benefits as a financing tool in a recent report stating that ICOs offer a new way to raise capital for projects if appropriately regulated and supervised.
However, OECD considers that the ICO ecosystem is not mature enough to be envisaged as a mainstream mechanism: in their current shape and form ICOs carry relevant risks for issuers and investors subscribing a token offering.
The international organization mentioned the uncertainty around the applicable regulation and the lack of consumer protection as some of the most significant risks around ICOs, preventing them from emerging as a conventional option for funding.
However, OECD also stated that the situation may change — if policy makers create the necessary conditions “to facilitate the development of ICOs in a safe and fair manner”.
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