Regulators should mandate information disclosure standards for initial coin offerings (ICOs), an advisor to China’s central bank argued this week.
Sheng Songcheng, an advisor to the People’s Bank of China, spoke with business journal Yicai Global in an interview published on July 7. Sheng argued that prospective investors should be cautious of ICOs – through which cryptographic tokens are sold and distributed via a blockchain – and called for “moderate regulation” of the activity.
As part of that process, he argued, “information disclosure requirements and moderate regulation for ICO projects must be introduced”, according to the journal.
That said, he also expressed support for an environment that promotes innovation technology uses, with the government making public both the risks and opportunities and involved.
Sheng said in the interview:
“Only time and market dynamics will tell how popular blockchain technologies and ICOs will become in the future. Moderate regulation should be applied, but it should not stifle innovation.”
His comments come months after the PBoC began to play a more active role in policing the country’s digital currency space, a policy shift that led to a months-long withdrawal freeze at several leading China-based exchanges. Withdrawals at those markets were reactivated in late May.
At the same time, the central bank has been investigating the launch of a digital currency of its own. Yao Qian, who works in the PBoC’s technology department, recently detailed some of the concepts the bank is exploring.
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