Several comments arise when a ‘bear market’ happened to the crypto industry which led some to exit crypto.
South Korea even supported the Initial Coin Offering (ICO) ban in their country.
Yet, despite all the negative impressions and predictions on cryptos, Austalia seems to see it the other way around.
Just recently, the Australian Treasury released an issue paper which covers how the country looks at the potential impacts of ICOs.
As reported by Micky News, the Australian Treasury said that they are aware of the possible risks in investing in ICOs, but they still believe that great prosperity will come to their nation after those risks were overcome.
ICOs do not have a distinct definition yet, but it commonly involves creation of digital tokens that runs through blockchain technology.
The purpose of the said tokens is to be used as a medium of exchange among businesses which are under blockchain technology.
ICOs are believed to bring advantage to businesses as it enables investors to raise funds by issuing equity, hence, they can use the raised funds to be spent on an early-stage platform or to develop their products in the long run.
It can also lead for businesses to start-up quickly and acquire first-mover advantages in the blockchain market.
In the case of ICOs which are not equity sales related, they are also advantageous as the full equity ownership and control will be retained to the business.
According to the issues paper, some tokens do not have rights attached to it which means that those money received were considered to be donations.
In addition, ICO tokens can be distributed to a large number of small businesses. Because of this, other small-scale investors will most likely be interested in venturing since they still have limited capital.
It was also said that despite all the high revenues collected from ICO businesses that led to real economic gains in some countries, those gains will still depend on those investors who seek to raise their capital.
Tracing to the historical records of ICOs, investors’ excitement often lead to excess, fraud, and misallocation of funds which brings a negative return of investment on the end of the country’s economic growth.