Cryptocurrency Initial Coin Offerings (ICO) have become all the rage these days as that particular part of the digital asset economy has raised millions of dollars over the past year. Just recently the Deputy Director of Science and Technology Department of People ‘s Bank of China (PBOC) and Director of the Digital Currency Research Institute for the bank detailed the central bank may create a “regulatory sandbox” for ICOs.
Also read: Russia Considers Recognizing Bitcoin in 2018 to Fight Money Laundering
The PBOC Digital Currency Research Director Discusses an ICO Regulatory Sandbox
According to a report from the Chinese cryptocurrency publication 8btc and the PBOC’s Digital Currency Research Director, Yao Qian’s own words, ICOs may be “helpful to the ecosystem.” The commentary from Qian is very interesting as the Director shows a lot of opinions throughout his statements. For instance, Qian believes bitcoin is not a currency, but rather it represents a “quasi-currency.” Qian also mentions that other cryptocurrencies like Ethereum and NXT that produce ICO token markets have shown significant returns for investors. The PBOC director thinks regulations could easily be applied to the top ten ICO projects with a substantial market value.
“A regulatory sandbox approach could be adopted towards ICO investments,” explains the PBOC’s Digital Currency Research Director, Yao Qian.
Prudent tolerance is accepted but it must not go wild. A legal framework for ICOs should be established as soon as possible. If an ICO project has no intrinsic value, then it’s a Ponzi scheme.
‘Mutual Development for Smart Contracts’
The statements from Qian reveal he may be a devoted proponent towards the cryptocurrency network Ethereum. Qian says that the Ethereum community is moving in “the right direction” and creating “mutual development for smart contracts” by utilizing its blockchain. However, blockchain technology in his opinion doesn’t necessarily have to be tethered to a token. “Blockchain technology doesn’t have to be tied to a digital currency — it’s an optional technology and a tool,” Qian details.
‘A Quasi-Digital-Currency Can Inherit the Merits of Traditional Currency’
The PBOC initiated its Digital Currency Research team back in 2014 and has since increased its R&D focus on bitcoin and private distributed ledger technologies. According to financial publication, Bloomberg, the PBOC’s cryptocurrency could threaten the two leading online payment incumbents in China like Alipay and Tencent’s Wechat. The PBOC’s Digital Currency Research Director, Yao Qian believes this is because quasi-digital-currencies can inherit the benefits of the country’s legal tender.
“The strength of fiat money lies in — assimilating the advanced and mature technology of quasi-digital-currency and inheriting merits of traditional currency,” Qian concludes in his statements.
Crowdfunding methods like ICOs have definitely captured the central bank’s interests as Qian believes a regulated version could provide newer ways for regional businesses to raise funds.
What do you think about China’s central bank discussing a regulatory sandbox for ICOs? Let us know in the comments below.
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