China’s position on cryptocurrencies remains unfazed as the country’s central bank released a paper which warns of bubbles in the industry and calls for the central government to sever its position even more.
Pressure on Cryptocurrencies Continues
After announcing that it intends to introduce regulations for blockchain censorship, China has taken yet another step to warn investors of the risks of cryptocurrencies.
The People’s Bank of China (PBoC) has released a paper called “What can a blockchain do and not do?” which reportedly calls on the central government to tighten its grip on the matter because of the contained financial risk. The paper reads:
Speculation, market manipulation, and even violations of laws and regulations are common, especially for token projects involving public offering transactions.
This is far from being the first warning from the PBoC on the risks of investing in cryptocurrencies. Back in September, the bank warned against fake digital currency schemes.
China’s Two-Fold Position
China’s position on blockchain and cryptocurrencies is a particularly interesting one. Not only did the country ban cryptocurrencies, it also reportedly blocked all websites which are linked to cryptocurrency trading and to initial coin offerings (ICOs).
However, the country doesn’t seem to have anything against the technology which underlies most of the digital currencies – the blockchain. In fact, China has so much faith in it that it allowed evidence authentication through it.
The country has created numerous government-backed funds to advance the development of the nascent technology. What is more, even the PBoC, which is amongst the institutions which lead the march against cryptocurrencies, recently helped launch a trial of a local finance blockchain platform in Guangdong Province.
Speaking on the matter was Li Chao, a Beijing-based blockchain analyst, who noted:
China has been cracking down on activities using virtual currencies, but blockchain is a quite advanced technology which has been adopted by many countries. So China will definitely not lag behind. Blockchain technology could also ensure a more efficient and safe information-sharing system, and it is expected to reduce the financing costs for micro- to medium-sized enterprises.
What do you think of China’s position on blockchain and cryptocurrencies? Don’t hesitate to let us know in the comments below!
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