PBoC States Bitcoin Isn’t Money, Cryptocurrency ICOs Need More Transparency – The Merkle

China always plays a critical role in the future of Bitcoin. Whenlocal exchanges suspend withdrawals, itsprice plummets. Now that the PBoC has rendered its latest verdict, the impact on the Bitcoin price remains to be determined. As was to be expected, the institution claimsBitcoin is not money. Theyalsofeel there is a growing need for cryptocurrency ICO transparency.

Contrary to what some people expected, the PBoC will not follow Japans plans when it comes to regulating cryptocurrency. Chinas national bank has no intention to categorizeBitcoin as money, and that situation will not change anytime soon. The PBoC feels Bitcoin is a string of code fundamentally different from gold and lacksany natural value. Virtual currency has acceptedvalue, which is a factor the bank will not dispute right now.

No one trulyexpected the Chinese government to officially recognize Bitcoin as money. That would have gone against everything the PBoC stands for and has planned for the future. China is one of multiple countries looking to issue itsown national digital currency in the future. Making Bitcoin legal, if only to a certain degree, would have countered those future plans before they wereeven set in motion. It is certainly possible that this situation will change in the future, but for now Bitcoin is not money in China.

That does not have to be bad news, since the value of Bitcoin will not be affected all that much as a result. China has always been a country known for doing its own thing, and Bitcoin is a significant threat to itsown financial ecosystem. Having a tool that provides real-time financial transparency would not be in the best interest of the Chinese government. However, the PBoCscomments were not all negative asit acknowledged the deflationary nature of Bitcoin wouldprovide economic development.

The PBoC also touched upon the concept of ICOs. As most users are well aware, cryptocurrency ICOs have become the new norm these days. Every project, whizzkid and herdog are raising money to build something new using powerful technology. Very few suchprojects have anythingto show for it, despite receiving millions of dollars in funding to date. Time is of the essence in this regard, as initial investors will not remain overly patient for much longer.

The ICO phenomenon has attracted the attention of the PBoC, which is both good and bad. On the positive side, it seems regulation of these fundraising efforts may be a lot more imminentthan we think. The bad side is thatthis will make it a lot more difficult to raise money in a decentralized manner moving forward. No specific regulatory measures have been proposed, but the central bank may implement appropriate regulation if the need arises.

The PBoC feels there is a lack of transparency when it comes to cryptocurrency ICOs, and that the disclosure of associated risks to potential investors needs to be improved upon. Without proper information disclosure standards, there are loopholes waiting to be exploited by people using this method of fundraising in a nefarious manner. The lack of continuous information after the money has been collected is another grave concern. All in all,the PBoC seems to have mixed feelings about cryptocurrencies as a whole.

Read the rest here:
PBoC States Bitcoin Isn't Money, Cryptocurrency ICOs Need More Transparency - The Merkle