The People's Bank of China has banned the country's companies from making crypto-currency placements as a method of financing. This new measure has fallen like a jug of cold water on the digital currencies that retreat with vigor in the markets. The bitcoin is left close to 10% and fixes up to $ 4,150 a unit, while the ether sinks about 19% to $ 283 per unit.
These types of placements, known as Initial Coin Offerings (ICO), which, as they stand out from BBVA, are a form of business financing, which, unlike a traditional financing round, or even a Public Sale Operation (OPV) to the tokens market, and their investors pay with digital coins, such as bitcoin or ether. Everything is done through blockchain.
As they point out from this bank, a token is a unit of value that an organization creates to govern its business model and empower its users to interact with its products, while facilitating the distribution and sharing of benefits among all its shareholders .
The intrusion of the Chinese central bank is a major obstacle to the development of this financing model, which was growing strongly in recent years. According to Reuters, central banks fear the expansion of these decentralized digital currencies, which could pose the biggest threat to the central bank's monopoly on money issues.
Money back
Now, following the decision of the People's Bank of China, individuals and organizations that have raised funds through ICOs will have to take steps to return the funds, according to the joint communicated issued by the People's Bank of China, stock and banking regulators and other government departments.
Zennon Kapron, director of Shanghai-based financial technology consultancy Kapronasia, says regulators are trying to curb ICOs to better understand the phenomenon, but this regulation is presently being imposed to curb this type of movement could relax in the future, says this expert.
"Regulators globally are struggling to understand what the ICOs are, what the risks are and how to make them decrease and regulate them," he says.
"China, in many ways, is no different than the US or Singapore, we recognize that we have to expel or ban such operations until we find out how to deal with them ... I think it will be a bit of a temporary measure," the expert told Reuters .
A member of the WeChat network platform has noted that "music has stopped". Another expert consulted by the British agency alerts investors: "Hurry and sell your bitcoins".
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