A senior aide and advisor to China’s central bank has called for the regulation of ICO (initial coin offering) projects while urging investors to show caution.
In an interview with prominent Chinese financial publication Yicai, Sheng Songcheng – a counselor to the People’s Bank of China (PBoC), claimed moderate regulation was necessary for ICOs. A radical new model of crowdfunding based on cryptocurrency tokens, startups have made millions via ICOs, sometimes with little more than a whitepaper and a website to show for their wares.
Sheng believes the government should warn investors of the risks whilst ensuring that regulatory moves don’t trample on innovation.
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Moderate regulation should be applied, but it should not stifle innovation.
Sheng, a former PBoC official, pointed to skepticism in ICO projects predominantly due to the lack of uniform information disclosure standards and procedures. The lack of regulatory oversight and effective supervision, he believes, has seen some startups benefit from ‘overhyped’ projects.
Without calling any of them out, Sheng added that ‘many’ ICOs had exploited the lack of any disclosure requirements.
“Only time and market dynamics will tell how popular blockchain technologies and ICOs will become in the future,” added Sheng.
In the same interview, the former central banker also opined that decentralized, global digital currencies like bitcoin were assets that lack the characteristics of a ‘legitimate currency.’
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