People’s Bank of China issued an article "Effectively Strengthening Virtual Currency Supervision to Firmly Maintain National Currency Issuing Rights,” The Beijing News reports.
The article largely reiterates that virtual currency is not a true currency and may cause financial instability. The crypto tokens are easily used as speculative tools, the article strengthens, criminals create their own trading venues or self-declared as agents to invest in overseas trading venues, create their own virtual currency, and use ICO, IFO and IMO, and so on, lacking practical application scenarios of the token collection and engaged in virtual currency financing and frenzy speculation.
The collapse of the virtual currency speculative bubble may cause economic and financial turmoil, the article says.
China’s officials believe that criminals can “easily” set up their own trading venues and declare themselves agents, allowing them to invest in foreign entities and raise money through initial coin offerings.
China’s central bank the People’s Bank of China proclaimed initial coin offerings (ICOs) illegal and demanded all related fundraising activity to be halted immediately. Chinese Bitcoin exchanges were ordered to stop all trading from September 30 which also affected the Bitcoin’s price.
By Ksenia Batanova