Kelly Robertson
Japan is known for its high-tech society and it is already one of the biggest cryptocurrency markets in the world. So it was everything but surprising to learn that one of its villages, Nishiawakura in Okayama Prefecture, is planning to conduct an initial coin offering (ICO) as a way to boost its economy. According to a CoinTelegraph report, the local government aims to work with a blockchain technology provider as its partner in the undertaking.
The plan is not all that clear at this stage, but from what we’ve understood they don’t plan to use popular platforms, such as Ethereum and Waves, in the ICO. The money raised will go towards financing projects to upgrade vital infrastructure in the village.
Using centralized approach
Nishiawakura’s partner will create a dedicated chain for the ICO, with the option to eventually connect it to the Bitcoin blockchain. The technology uses hosting from Amazon Web Services (AWS), which is a rather centralized approach.
Perhaps that is a better way for a government-backed entity, we can’t tell. We do know that people of Japan are open minded about new technologies, and if this ICO proves successful — we may see other towns taking the similar route.
Also, we know that central bankers of the world prefer centralized issuance of any currency, whether it’s regular fiat or cryptocurrency.
Lack of ICO regulation
At the moment, there is no ICO regulation in Japan to deal with these sort of services. On one hand, this makes it easier for everyone to raise money, but on the other hand – it could also make some investors vary about the offering.
In any case — even if this ICO doesn’t go through or doesn’t raise the expected amount of money — Nishiawakura can still take a loan from a central government in Tokyo. Or go to a regular bank.
We will be watching how this ICO goes and report on its eventual consequences, which could pave the way for how municipalities finance some of their projects. Cool days ahead…
