The Central Bank of China reiterated its stance on cryptocurrency in the country, warning interested investors of the inherent risk of cryptocurrency. The apex bank also hailed the success of its clamp down on cryptocurrency activities in the country.
Central Bank of China’s Stance On Cryptocurrency
On the 18 September 2018, the Central Bank of China issued a public notice to reiterate its stance on cryptocurrency and also remind cryptocurrency investors of the inherent danger in Initial Coin Offerings (ICOs) and cryptocurrency trading.
The public notice reiterates the bank’s already adopted cryptocurrency ban issued by the Office for Special Remediation of Internet Financial Risks, in September 2017, a year ago.
The People’s Bank of China re-emphasized unauthorized and illegal ICOs financing means, which pose a threat to economic, financial and social order.
Notably, fake and dubious ICOs have led to many losing their investments to wrong ventures. This has become very prominent in the cryptocurrency space, more especially during the hay days of cryptocurrency bubble a year ago, when Bitcoin’s price almost reach $20,000.
China’s apex bank noted that ICOs are suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes, and other unlawful and criminal activities.
Meanwhile, since a year ago that stringent policies were instigated against cryptocurrency and ICO offerings in the country, the bank stated that there had been a considerable decline of the global share of the domestic virtual currency transactions from initial 90% to less than 5%.
Nevertheless, the country is still up against the antics of cryptocurrency trade and ICO offering in the country, because of the increase in offshore exchange that serves as a tool for bypassing the mainland ban.
Measures recently adopted noted by the apex financial institution of China include, blocking of 124 IP address suspected of providing gateway services to domestic cryptocurrency traders. Also, clean up effort has been redoubled on payment channels and strengthening of its monitoring mechanisms, this has led to the closure of over 3000 accounts. The notice also states intensifying effort of the government in clamping down on cryptocurrency hype materials.
China, Cryptocurrency and Blockchain Technology
While cryptocurrency and related activities have been banned in the country, the country continues its adoption of blockchain tech for its taxation system and the building of future city among others.
Notably, while China has further its ban process on cryptocurrency and ICOs, Russia, Ukraine, and France recently started the process of regulating ICOs in their countries to annex the potentials of the cryptocurrency industry.
Furthermore, the offline ban on cryptocurrency in China is further supported online by Chinese giant tech firms, such as Tencent, Alipay among others.