China’s PBoC Releases Advice to Govt to Strengthen Blockchain and Crypto Financing Supervision
The People’s Bank of China has held onto their anti-cryptocurrency stance for quite some time, and they do not seem to be backing down anytime soon. As reported by Reuters on November 6th, the PBOC has issued a warning to the government to strengthen their supervision of blockchain financing, based on the “bubbles” in the market.
According to a statement from the PBOC, the government needs to watch how it monitors “speculation, market manipulation, and other irregularities.” It is their belief that these issues commonly plague blockchain investment and financing schemes.
Local news outlets in China have been releasing other details about the warning from the bank, which are allegedly from a working paper called “What Can Blockchain Do and What Can it Not?” Based on the information available, this paper was written by the director of the Research Bureau of the PBOC, Xu Zhong. Zhong wrote,
“There are few blockchain projects that really land and produce social benefits. In addition to the low physical performance of blockchains, the shortcomings of blockchain economic functions are also important reasons. It should be based on continuous research and experimentation. Rationally objectively assess what the blockchain can and cannot do.”
Forex East Money added that the paper includes an evaluation of the tokenization that “mainstream” blockchain projects have taken on. It also provides clarification for the technology used in the projects, including consensus mechanisms, smart contracts, and token uses within blockchain ecosystems. The bank also examined the various performance and security found on blockchain systems.
According to a report by CoinTelegraph on November 5th, the PBOC is now also looking at token airdrops, though they believed that it is simply a modification to the current Initial Coin Offerings (ICOs). This would be a major conflict of interest, considering that China has maintained a ban against ICOs since September last year. The report also noted that the bank brought former warnings to the public back into focus, advising the public to be fervent in their apprehension available fraudulent whitepapers and crypto investment opportunities.
Overall, the PBOC and the Chinese government have taken on a positive view of blockchain technology, though this new warning has come as a result of other regulators in the industry as well. The working paper from People’s Bank of China can be downloaded as a PDF from http://www.pbc.gov.cn/english/3278277/3487674/3658022/index.html.