PBoC Advisor: 'China Was Right to Ban ICOs'

An advisor to China's central bank said he supports the recent government crackdown on domestic initial coin offerings (ICOs).

As previously reported by CoinDesk, the People's Bank of China and other regulators in the country moved in early September to restrict new offerings that utilize the funding model, through which parties can issue digital tokens that are cryptographically tied to a blockchain in order to raise funds or create a network effect for that project.

In announcing the ban, China declared the method a form of illegal financing, triggering a range of platform closures and efforts to refund investor contributions. According to Sheng Songcheng, counselor to the PBoC and an adjunct professor of economics and finance at the China Europe International Business School, the Chinese government made the right move.

Writing for Chinese-language newspaper Caixin, Songcheng – who previously said that the government should mandate disclosure standards for ICO organizers – argued that the crackdown was necessary in order to inhibit the "chaos" caused by unfettered finance.