Last week, Chinese financial regulators sent shockwaves across the cryptocurrency world when reports surfaced that authorities were preparing for a crackdown on ICOs and exchanges in the country. Although hardly surprising given the Chinese government’s often tense relationship with the booming blockchain sector, many suspected that the so-called “ban” on ICOs wasn’t quite what it seemed. This week, those suspicions were confirmed when Hu Bing, a researcher at the Institute of Finance and Banking, revealed in an interview with state-owned national television network CCTV-13 that the “ban” was more like a “pause.”According to Bing, the decision to halt all ICO activity in the country — and to force exiting ICOs to return invested funds — is actually a temporary step. The controversial move was intended to provide Chinese regulators with time to create a regulatory framework and licensing plan for future ICOs. If true, this could indicate plans create a program similar to the “BitLicense” system currently operated by the New York State Department of Financial Services (NYSDF).
Although the news is encouraging for China’s ICO community, it’s not clear when such a regulatory program would launch, or even what form it might take. Bing is also a relatively minor player in the Chinese government — his agency is focused on research, not policy — and it’s possible that his perspective represents just one of many conflicting views among financial regulators and academics about the future of ICOs in the country. His statements suggest that Chinese regulators may soon be planning to press forward with new ICO rules, but this could also be little more than informed speculation.
The Chinese ICO “ban” has almost certainly played a significant role in the recent price drops across cryptocurrencies, with bitcoin down nearly $1,100 from its all-time high of $4,950 earlier this month. The Chinese “ban” on ICOs has also been mitigated to some extent by recent pro-crypto/ICO announcements from Russia and Canada.