The Central Bank of China (PBoC ) has issued the latest warning touching blockchain related investment and taking strict measures for extra supervision in the country.
On Nov. 6, The People’s Bank of China has issued a working paper entitled “What Can Blockchain Do and What Can it Not?” corroborated by multiple local Chinese media outlets.
Since, September 2017, after the outright ban on Initial Coin Offerings (ICOs) in China by the PBoC still the activities related to cryptocurrency are going on and few major brands have also shifted their operations to the other elevated and supporting countries to circumvent the regulations. The latest move by the PBoC is to augment its scrutiny on the continuous endeavor in the nation and now focusing on token airdrops, which it characterized as “disguised” Initial Coin Offerings (ICOs). The PBoC restated its past warnings countering to duplicitous whitepapers and cryptocurrency investment projects that pretense as blockchain innovation.
As per the advisory board of China Financial Forty Forum, the paper was written by Xu Zhong, director of the Research Bureau of the PBoC, and expresses that:
“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.”
The PBoC’s dubious tone this week is not exceptional, as other domestic regulators have similarly warned in the past against “mythologizing” the technology. However, Chinese political authorities along with the Central Bank have a positive perspective towards blockchain but not on cryptocurrency financing and investment.
According to the Forex East Money, a local financial news medium, the paper necessitates an economic analysis of the “tokenization” paradigm adopted by “mainstream” blockchain projects and explains the technological principles such as consensus mechanisms, smart contracts, and token uses within blockchain ecosystems. Forex East Money further summarized that the bank has evaluated the performance and security traits of blockchain structure,and wrapped up after focusing on the strong evaluation of the bleeding technology’s aids and constraints.
In order to strengthen the supervision on the speculative market and to curb the manipulative activities, and other irregularities in China the PBoC’s anti-cryptocurrency standpoint and consideration of blockchain investments as “Bubble” is towards the warning and advising the government which is not unfamiliar by the citizens.