The People’s Bank of China (PBoC) has warned on a possible bubble in blockchain financing. The China’s supreme bank has advised the government to be super vigilant so as to protect its citizens from suffuring catastrophic losses as a result of the impending burst.
The Chinese Central bank has been hard on cryptos and ICOs outrightly with the latter being classified as illegal. The institution recently published a report that among other crypto related information extended its ban on airdrops-cryptos offered to investors for free. In the publication, the institution described airdrops as ICOs disquised as free tokens.
Fraudsters Alert
It futher advised relevant governing authorities to watch out for businesses crypto businesses masquareding innovators in the blockchain space. Ironically, the Chinese government recently unveiled a plan that would help the state be a global leader in Artificial interligence (AI) aThe nd blockchain technologies.
Several Chinese Fintechs have ventured in blockchain related innovations with big money being splashed for these explorations. Now the country’s top bank is concerned that incase of a crash, the implications would be severe.
A section of the white paper read, “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. ”
Financial malpractices
The working paper dubbed “What can Blockchain Do and What can it not?” advises the government to maintain extra vigilance on “speculation, market manipulation and other irregularities,” commonly pracatised in blockchain financing.
The paper according to sources discusses every sphere of the blockchain technology including smart contracts and how cryptos can be used withing a blockchain network. The paper then draws the pros and cons of the much hyped technology.
Since cryptos and ICOs inception, China has not been convinced that they are the future of currency and startup financing respectively. The nation through its no nonesence Central bank views cryptos as possible tools for evading economic sanctions, money laundering and pyramid schemes eyeing investors’ money.
