The People’s Bank of China (PBoC), China’s central bank, has recently released a research paper in which it argues cryptocurrencies are inferior to fiat currencies, and as such won’t be able to disrupt the traditional monetary system.
The paper, titled “What can a blockchain do and not do?” was first spotted by Finance Magnates. It’s written by the director of the central bank’s research unit Xu Zhong, and revolves around crypto’s supposed inability to disrupt the financial system.
In the document, Zhong goes as far as saying that blockchain technology is a “utopian fantasy” that will have little to no impact on the financial system. It also argues that cryptocurrencies have no intrinsic value.
It adds that the crypto ecosystem has “obvious bubbles” within it, and specifies the initial coin offering (ICO) market as one. As CryptoGlobe covered, ICOs raised $8.3 billion in the second quarter of this year, and have surpassed the amount raised in 2017.
Last year, the Chinese government banned the fundraising practice, and later on banned domestic cryptocurrency exchanges. The country’s crackdown confused many in the industry, and saw various prominent firms shut down.
Notably the country’s crackdown doesn’t seem to be over yet, as earlier this year search giant Baidu started censoring cryptocurrency-related discussions on its forums. Users trying to access boards related to the nascent industry reportedly saw the following message:
[This forum is temporarily closed] in accordance with relevant laws, regulations and policies.
The PBoC itself revealed it suspected foreign crypto firms were targeting China’s residents with airdrops and giveaways, and as such is set to crack down on these as well. Demand for cryptos in the country is still visible, however, as earlier this month a school teacher was fired after being caught mining Ethereum’s ether on school property.
While China’s central bank is seemingly opening up to blockchain technology, as Zhong’s paper revealed it’s welcoming of the industry, the judicial system has seemingly been recognizing people’s rights to hold crypto. As covered, the Shenzhen Court of International Arbitration recently ruled cryptos like bitcoin should be protected by law as property