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.