The Chinese central bank, the People's Bank of China (PBoC), has warned of "bubbles" in funding and investments linked to the blockchain, according to Reuters reported on 6 November.
The PBoC, which is known for its anti-cryptocurrency position, reported that the government has strengthened its oversight on "speculation, market manipulation and other irregularities", which it claims are common in blockchain investments and in national funding systems. .
The local Chinese news revealed further details from the bank's last warning, which was reported in the form of a PBoC working document on 6 November, entitled "What can Blockchain do and what can not?" According to the China Financial Forty Forum think tank, the document was written by Xu Zhong, director of the PBoC Research Bureau, and states that:
"There are few blockchain projects that really land and produce social benefits." In addition to the low physical performance of blockchains, the failures of blockchain economic functions are also important reasons: it should be based on continuous research and experimentation. the blockchain can and can not do. "
Source of local financial news Forex East Money further outlined that the document involves an economic analysis of the "tokenisation" paradigm adopted by "mainstream" blockchain projects and clarifies the technological principles such as consensus mechanisms, smart contracts and token uses. inside the blockchain ecosystems. Forex East Money noted that the bank also analyzed the performance and security aspects of blockchain systems, concluding with an analysis of the advantages and limitations of the technology.
As reported yesterday, the PBoC has recently expanded its scrutiny to include launching tokens, which featured as offers of initial "disguised" (ICO) currencies, which have been banned in China since September 2017 In addition to its new focus on airdrops, the bank reiterated preventive warnings against fraudulent whitepapers and encrypted investment projects disguised as "blockchain innovation".
Although the PBoC and the Chinese political establishment have broadly adopted a positive position towards the blockchain, the ambivalent tone of the PBoC this week is not unprecedented, as other national analysts have in the past warned to "mythologize" technology.