China May Reverse Ban on Cryptocurrencies

China Ban on Cryptocurrencies

It appears that government officials in China are having second thoughts about the country’s ban on cryptocurrencies and ICOs. Multiple media outlets are reporting that recent comments by the newly appointed governor of the Peoples Bank of China indicate a change in tone towards Bitcoin and cryptocurrencies.

It appears that government officials are also concerned with the recent moves made by crypto friendly jurisdictions like South Korea and Japan. They fear losing out to these countries concerning innovation.

The situation in China with regards to ICOs and cryptocurrency trading was out of control, and officials felt they had no alternative but to institute a total ban. A recent speech by Yang Dong, the Vice President of the Law School at China People’s University, states that regulation on cryptocurrencies in China was to “Chase away the bad projects” and the intent was to develop “good projects.” Regulators were also concerned with “Market Making” activity on the part of the Chinese exchanges with little regard for risk management. Mr. Yang indicated that we might see some government approved projects as soon as this year.

It is interesting in the midst of ban; China’s Ministry of Industry & Information Technology has decided to issue an official ranking of cryptocurrencies. Ethereum ranks number 1 and Bitcoin ranks 13th.

China has a rich history of instituting a ban and then realizing the harm and unintended consequences. Most notable being China’s infamous one-child policy. There is no indication on a timetable yet on the reversal and it most likely done in stages.