Several high-profile banking executives had not-so-nice things to say about initial coin offerings (ICOs) at an event in New York City this week.
Hosted by the Moscow Exchange Group, around 400 attendees were present at the forum, including central bankers and representatives of the "Big Four" accounting firms. And though a range of topics was discussed, none proved more top-of-mind than the blockchain token sector.
In line with the wider discourse on display in recent weeks, the first deputy governor of Russia's central bank, Ksenia Yudaeva, went so far as to compare ICOs to the pyramids schemes of the 1990s that cost investors hundreds of millions of dollars.
Yudaeva, though, is not in the latter camp. She told the audience:
And the negative pressure that these fundraising efforts have put on the economy is something Yudaeva, who reports directly to the Russian central bank's governor, said she fears might happen again, stating: "We are very much afraid of this problem. We are very skeptical."
Whatever the potential benefits of blockchain itself might be, she continued, cryptocurrencies are no longer viewed by the bank as a legitimate means of exchange.
"Our opinion is that the ruble is the only payment instrument in Russia and we think we should be extremely careful with cryptocurrencies and how they work," she said.
Following Yudaeva's comments, global chief economist at Citi, Willem Buiter, went even further in his condemnation of cryptocurrencies and ICOs.
"I think that cryptocurrencies are going to meet the fate with other authorities that they have met with China's authorities," he said, alluding the country's ban of token sales.
ICOs "will be cracked down upon," Buiter said.
Buiter, like Yudaeva, also gave a nod to the potential benefits of blockchain itself, but quickly returned to disapproval with the way some people and companies are using the technology.
"Initial coin offerings are just regulatory arbitrage to avoid IPO restrictions," he said, referring to initial public offerings on which companies raise money by selling stock shares on a regulated exchange.
Buiter concluded with a little grudging praise for ICOs, saying:
Image of Ksenia Yudaeva via Michael del Castillo for CoinDesk
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.