@krans That's ok, they can go with `.іо` instead. (That is, a Cryllic i and o with a zero-width non-joiner in the middle).
Maybe.
The ICANN FAQ says it has to be Latin characters, but "The use of non-Latin characters (such as Cyrillic, Arabic, Chinese, etc.) would also be allowed in gTLDs" according to Brad White (ICANN's director of global media affairs) in 2015.