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Regulating initial coin offerings at this time is mainly to warn of the risks and to protect the interests of investors, Sheng Songcheng, Counselor of the People’s Bank of China and Executive Vice President of the CEIBS Lujiazui Institute of International Finance (CLIIF), told Yicai.com in an interview on Tuesday.

The comment was in response to the People’s Bank of China’s announcement on Monday which declared all ICOs illegal and demanded all fundraising activities to halt immediately.

An ICO is a form of crowd-sourced fundraising that uses cryptocurrencies, which work as a medium of exchange using encryption to secure transactions and for creating additional units.

Although many ICO cryptocurrencies were said to be “of no actual value,” Sheng believes China should still encourage blockchain technology.

“Bitcoin, the first and most famous cryptocurrency and digital payment system, has been widely recognized by world agencies, governments, businesses, experts and practitioners as a very important and innovative technology,” Sheng said.

The World Economic Forum also predicted that by 2027, about 10% of global GDP will be stored on blockchains.

Sheng believed that it will be difficult to completely ban cryptocurrency financing and trading platforms, but it is possible to further standardize digital assets.

He also stressed that any cryptocurrency is essentially not currency. “Technological progress will promote human social progress and institutional reform, but technology cannot replace the country’s economic policy,” Sheng said.

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