People’s Bank of China (PBoC) warns about the Risks of Cryptocurrency and ICOs
PBoC warns investors of the risks of Crypto and ICOs
The Chinese central bank which is popularly known as the People’s Bank of China (PBoC) has issued a notice to the Chinese citizens informing them of the risks of cryptocurrency trading and ICOs. The public notice was issued through the bank’s Shanghai branch to inform investors about the risks and awareness of Initial Coin Offerings. The bank has asked investors to avoid digital currencies since they survive through speculation.
This warning has come a year after the PBoC completely banned all ICOs in the country citing that it was an illegal way to raise funds. In its statement today the bank stated that the ban was successful noting that:
“[T]he global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market. The impact has been highly recognized by the community.”
However, PBoC still admitted that crypto trading was still thriving through oversee exchange despite the ban which was issued in 2017. Regulators have however been working to block access of 124 exchanges in China which people have been using to trade digital currencies. The bank wants the IP address of the exchanges blocked so that trading can completely stop in the country.
In the fight against ICOs the bank through its management noted that:
“In addition, it [the internet authority] has also strengthened the disposal of domestic ICO and virtual currency transaction related websites, public numbers, social media etc., and permanently blocked some public numbers suspected of releasing ICO and virtual currency trading hype information.”
The fight against ICOs and digital currencies seems to be very serious in China. Last month Alibaba, Baidu and Tencent all banned crypto transactions on their platforms. Even though the three tech giants said that it was a management decision the move seems to have come from the government. The government has been encouraging its citizen to report any ICO operations or crypto activities.
Before China banned that trading to digital currencies it was the world’s largest market. China controlled more than 50% of Bitcoin transactions popularity which has now moved to Japan which legalized the trading of digital currencies. China also has the world’s largest exchanges which moved to other countries after the ban.
Chinese authorities have insisted that they are happy with Bitcoin’s underlying technology which is Blockchain technology and that they will support its development. They have however added that there is no chance of the country lifting the ban on ICOs and digital currencies.