There has been a lot of coverage of the Chinese banning Initial Coin Offerings (ICOs) over the last fortnight. During a very recent television interview a spokesman for the Institute of Finance and Banking, an academic organisation that works closely with the Chinese government, told interviewers that the ban is “only temporary”.
The spokesman also explained that declaring ICOs an illegal method of fundraising is just to allow the relevant government bodies to construct the required regulatory framework to support and protect both investors and the companies looking to generate funds. According to some translations he also added that ICOs had only been “paused” rather than “forbidden”, something observers have taken as another sign that ICOs will resume in China in the near future.
What was evident is that if ICOs are reinstated as a going concern, they will be closely monitored and will have to be licensed by the Chinese government and operated within a highly controlled environment.
As this stage a lot of the commentary surrounding the Chinese government’s eventual conclusion is based upon nothing more than assumption, opinion and conjecture but even with that accepted, there is concern the resulting regulatory system may put people off pursuing potential ICOs.
The Chinese also need to stay awake to the possibility that many of their near neighbours may be poised to exploit their hesitancy and their perceived opposition to new technologies including, as recently as 2013, Bitcoin. The enthusiasm and flexibility being shown by countries like Japan, Hong Kong and Singapore towards the ICO market could end up costing China dear.
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