The Central Bank of China spoke about plans to combat the trade in cryptocurrencies and tokensales

Endy Callahan

The Shanghai division of the NBK (People's Bank of China) reports that it will soon completely destroy the trade in cryptocurrencies and tokensales. In confirmation of words, the document where the list of measures in detail is listed was published, with measures for those who broke than trade restriction.

What is the difference between tokensale and cryptocurrency?

Internet users are used to the word cryptocurrency and generally understand what it is about. However, a lot of crypto enthusiasts are in the gray regarding tokensale and its difference from the cryptocurrency. This term referers to tokens at the time of the ICO, when the tokens are not yet a cryptocurrency in the General sense of the word, but are already sold to investors at an allegedly low price with the possibility of resale and earnings on coin speculation when the cryptocurrency enters the market.

You need to understand, that not all tokensales are worth investing in. Sometimes the profit from investments can be extremely low or there will be no profit at all and the price on the cryptocurrency market will be lower than the value of the token at the time of the sale of tokensales during the ICO, which will lead to direct losses.

Official reasons for China's struggle with cryptocurrencies

  • It is believed that bitcoin and other currencies are not registered securities that do not receive taxes from the NBK.
  • Cryptocurrencies, according to the Chinese Communist party, are financial pyramids, because they do not have financial security, and in themselves are a financial asset.
  • The Central CCTV channel has spoken out that these are fraudulent "Ponzi" schemes.

The Ponzi scheme is named after Charles Ponzi, a graduate of the Italian University Of La Sapienza, who is considered one of the first known creators of financial pyramids.

It should be noted and a huge number of fakes that China is going to ban trade, mining and other operations with bitcoin on its territory. This information could be treated with distrust, if not the appearance of the document on measures of struggle published by the Shanghai branch of the NBK.

Unofficial reasons for China's struggle with cryptocurrencies

Holding a forum in Shanghai, which announced the creation of an investment blockchain Fund. It will dwelve on China, Singapore and Australia. A legislative framework has been created, the so-called law on cryptography and competitors are being squeezed out. If you add here information about the possible launch of the national cryptocurrency of China, then there is a whole picture of the world.

Dovi Wang, who is one of the leaders of Primitive Ventures, separately noted several important, in her opinion, points of this document that should be paid attention to.

Statement by Ms. Van Dovey:

  • Any suggestions for token sales: ICO, IFO, IEO, STO are illegal fundraising.
  • The municipal police of Shanghai will stop the activities of any cryptocurrency exchanges in the city.
  •  Given that many sites are located abroad, the police will strongly discourage the withdrawal of cryptocurrency in Fiat.

It should be noted that Shanghai is an important political and economic center of the Republic of China. The appointment of a politician in Shanghai is considered a direct route to the Beijing government. However, this trade and industrial center, not all of China. It is possible that restrictions on trade in cryptocurrency and tokensales will affect the rest of the provinces of China, but at the moment restrictions are imposed by Shanghai, other confirmed data on this issue are not available.

It is extremely important to note the information that China itself is going to issue a national cryptocurrency. Details can be found in the article "A blockchain consortium of digital banks is being created in China. An investment Fund for a billion dollars has already been launched". It can be concluded that trading platforms, and, consequently, cryptocurrency trading will not be closed. Perhaps the authorities of the Republic are trying to take this economic phenomenon, as cryptocurrencies, under their state control and make a profit.

Will it be possible to control or not?

The question remains, will the Chinese authorities take control of cryptocurrencies? At the moment, when many coins are decentralized, the answer is definately no. However, given the trend of centralized cryptocurrencies such as Libra, there is an opportunity. Details about the launch of the new centralized currency "Libra" can be found in the article "the next collection of funds of the series a brought 25.5 million investments to the Libra Association cryptocurrency".

Whether the new coins will be decentralized or centralized in the future is anyone's guess. The winner of this puzzle and make the right investment, will get the main prize, a wealthy life.