There are indications that the ban on initial coin offerings by the Chinese government may be lifted in the future. This assertion has come from a number of sources, some of whom pointed to the remedial nature of the ban.
Bobby Lee, the CEO of BTCC the world’s oldest exchange based in Shanghai made the revelation in an interview with CNBC.
Mr. Lee said that he believes that the limitation will be lifted and licenses re-instituted in a way that ICOs will be better organized and safer to participate in. He likened the ban to the one-child policy of China that was revisited in 2016 permitting couples to have up to two children.
The Chinese government had banned the use of cryptocurencies and ICOs in the country last September in a move that caused a dip in prices of cryptocurrencies, especially Bitcoin. However, Bitcoin recovered quickly and has had a good run with prices nearly hitting $20,000 in a most amazing year. The bullish run was not unconnected with ICOs which drew a lot of interest to digital currencies. China and many other countries were not comfortable with the digital currency based crowdfunding and announced a restriction.
Exchanges, such as BTCC had to look elsewhere for clients after the ban, being placed in the uncomfortable position of operating out of China but not permitted to have Chinese customers. Mr. Lee said that he is convinced that the government will revisit the embargo because cryptocurrencies such as Bitcoin have shown a lot of resilience.
Though he said that he was not certain of the time frame, adding that this could happen in a few months, few years or decade, saying that nothing is permanent. His present view is a contrast with that which he expressed last year after the ban when he said it was permanent.
Mr. Yang Dong, the Director, Center for Financial Technology made a similar assertion in an interview during the Southeast Asian Blockchain Summit. According to Mr. Dong, the ban is not permanent but aims to sieve out and sanitize the system so that fraudulent ICOs can be excluded while useful ones are given room to thrive. He said that the system would be strictly regulated to get required results instead of having a situation where every entity jumps in raise funds through ICO.
The Chinese restriction has generated a lot of furor especially due to its effect on the coin market and the activities of some people within the Chinese crypto community to circumvent the ban. China is recently contemplating making a move against the mining of digital currencies as well. This is why the recent news of a possible suspension of the prohibition is surprising.
China’s influence on the policy of other nations in the region was felt after the ban. South Korea announced an embargo on cyptocurrencies after the Chinese one. This may be to ensure effective control of digital currency activities in the region or simply due to regional financial cooperation to stop Chinese from circumventing the ban through exchanges in nearby South Korea. In another statement released by South Korea, January 30, anonymous trading on exchanges are to be outlawed ostensibly to ensure compliance to the restriction by Chinese citizens.