Reality of ICO Ban: China Wants to Manage Digital Currency Platforms

China’s ban of initial coin offerings on Monday initially seemed to threaten the explosive growth of cryptocurrencies. But the ban isn’t as tough as it looks. What China is really doing is taking steps to manage cryptocurrency platforms so it can better control them.

It’s telling that China didn’t curtail cryptocurrencies themselves, given that they have all the elements that could challenge the government’s levers of control: They are decentralized, unregulated and anonymous. Instead, China has allowed—even encouraged—bitcoin and other financial technologies that use digital ledgers to grow.

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China’s central bankers recognize that blockchain-based technologies will be the financial infrastructure of the future. China understands the power of infrastructure to bind and build nations and partners. Its influence in Asia and Africa has spread along with the networks of highways and railroads it has built. China was late to join the internet and chafes under U.S. sway over the network. Finance offers China a new avenue to grow its international influence.

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China wants “to be a rich and powerful country, and they realize they need to have advanced financial technology.”