Enthusiasts of the crypto community believe that ICO is a revolutionary financial tool which helps projects that don’t have access to bank loans and institutional investors for any reason to solve problems with raising funds.
Bitnewtoday, together with experts, is discussing whether ICO will help financial companies to grow into full-fledged competitors of traditional financial organizations and whether small and medium-sized businesses will be able to get investments for business development through the tokens deployment.
Marco Amadori, the founder of InBitcoin, believes that ICO is a powerful tool, and probably in future, it will be able to give financial and small businesses from the real sector access to attracting finance. However, while the deployment of tokens is an immature product, it is necessary to gain experience. According to expert estimates, currently, about 99.99% of ICO are scams.
Andrei Povarov, an Associate Professor at the Institute of Business and Business Administration of the Russian Academy of Science, said: "Yes, the fintech companies tend to be more flexible and innovative, and therefore able to compete adequately with large banks and, indeed, can receive an additional impetus from ICO funding". However, the reputation of projects that attracted funding through the deployment of tokens, which was damaged by unfair and weak players, can lead to the fact that exciting and innovative fintech projects can get lost among all the others.
Alexander Novozhenov, the head of the Sibcoin Foundation, believes that in most cases, fintech startups do not need ICO. "In this sector, there are still enough tools to attract investments. However, fintech, as an industry, will certainly benefit from involving cryptocurrency into business", the expert concluded.
As for the real sector, the representative of the crypto industry believes that not every real business needs ICO. Before issuing tokens, the entrepreneur must answer the question: what way and why the business model will require the blockchain and cryptocurrency. If the business model can work without these components, then ICO is not needed.
It should also be taken into account that ICO is not a cheap option for business. Therefore, the sector of small and medium businesses is unlikely to capitalize on possibilities, although such examples still exist.
"But let's look at the statistics of successful ICOs. The leaders are the projects that provide the creation of blockchain infrastructure, financial projects, social networks, and games. The real sector is tiny among them. Perhaps in the traditional financial institutions of future will appear so-called crypto-desks offering ICO for business. Perhaps later this option will become more accessible and cost-effective for those companies where blockchain technology fits well", comments co-founder and COO of the financial company DeHedge Dmitry Anisimov, Ph.D. in Economics.
Clem Chambers, CEO of ADVFN and Online Blockchain plc. mentioned along with this: “ICOs are securities and will be soon regulated to be defined just like an equity and will carry associated costs. In the end, they will present little advantage over traditional equity”.
ICOs cannot wholly solve the funding problem. Financial services will become decentralized and more transparent in future and fintech will completely restructure the banking industry. “I’m sure that new services will emerge and replace big traditional banks. The financial landscape will look completely different”, said Stewie Zhu, CEO of Distributed Credit Chain (DCC).
Experts believe that tokenization will not be able to replace the traditional model of funding entirely shortly. Besides, we should note that the banking system itself is actively changing and becoming more and more "digital", switching to online and to mobile applications.