China’s Central Bank Doubles Down on Online Financial Safety

China remains a regime where initial coin offerings (ICOs) of blockchain projects are banned.

The People’s Bank of China (PBOC), the country’s central bank, recently organized a panel discussion on how to tackle regulating the digital currency space and to lay out their next plan. During the discussion, it was made clear that China would not waver in its commitment to control the digital currency space within its territory.

“In order to implement the decision-making process of the Party Central Committee and the State Council on the prevention and resolution of major risks and the first meeting of the State Council's Financial Stability Development Committee, the People's Bank of China and the Internet Finance Risk Special Restructuring Leading Group will hold a meeting,” the PBOC said during a special mobilization meeting.

PBOC Vice President and head of the committee Pan Gongsheng gave the most passionate argument during the meeting. Pan, who is also director of the State Administration of Foreign Exchange said the actions to be taken by the government are vital, and stressed that now is the time to pursue online financial safety aggressively.

He is suggesting three core policies to achieve this goal. These are to define the standards of online and blockchain trading, define with clarity the legal basis of ICOs in all its forms, and strengthen the boundaries of online insurance and non-bank payment services using cryptocurrencies.

It should be noted that the Chinese central bank played an important role in banning ICOs and cryptocurrency trading in the country, thus ending the country’s dominance in Bitcoin trading.

According to the PBOC, since the launch of the special rectification program, all departments and regions have closely cooperated and strengthened cooperation and carried out rectification work in a unified manner.

It said the overall risk level of Internet finance had dropped significantly, that the regulatory system has been gradually improved, and the disorderly development of the industry and the deterioration of the ecological environment have improved.

“But at the same time, we must be soberly aware that the task of risk prevention and resolution in the Internet finance field is still arduous, and the regulatory system that adapts to the characteristics of digital needs to be further improved,” it added.

Pan added that the committee should emphasize preventing illegal financial activities while strengthening the infrastructure to stop online financial fraud.