China’s largely unfavourable attitude to ICOs and cryptocurrencies more generally appears to be toughening. On Friday, the National Internet Finance Association (NIFA) held its annual meeting, outlining plans for a “special monitoring project … on virtual currencies, ICOs and ‘disguised’ ICOs.”
NIFA added that “2018 will be a defining year for how it normalizes and standardizes its existing efforts.” In other words, what were previously special measures for dealing with a new phenomenon are now to be adopted as standard practice to counteract that same phenomenon.
Cryptocurrency Phenomenon a General Target
Whilst China already bans ICOs, the NIFA statement appears to be calculated as a signal to web hosts to avoid carrying material that could be seen to be encouraging cryptocurrencies and ICOs. According to its spokesman, the increased regulation of blockchain fintech is needed to “facilitate long-term development of the industry.”
NIFA describes itself as a regulatory standards organisation. Whilst its role is purely advisory, it appears to operate more as a quasi-governmental agency approved by the State Council working in collaboration with various branches of the Chinese state, including the People’s Bank of China. As such, its statements are something of a barometer for Chinese policy.
On September 1st last year, it issued a warning on ICOs; three days later the People’s Bank of China had banned ICOs in their entirety.
The Chinese position is that activity in cryptocurrencies is destabilising, both to the economy and society. Though they have been experimenting with blockchain solutions to logistical issues, they have been wary of private initiatives and the interest taken by the Chinese public in cryptocurrencies generally.