People's Bank Of China Warns About Blockchain “Bubbles”
The People’s Bank of China (PBoC), which serves as the country’s central bank, issued a document warning of existing “bubbles” in financial and investment schemes related to blockchain, Reuters reports.
PBoC is reputed to have a tough position on cryptocurrencies. This time, it announced the need to strengthen control over the financial market, where there are speculations, manipulations, and other violations, which are considered common in investment schemes focused on blockchain technology.
Cointelegraph analyzed local media publications that provide some details regarding a document published under the title “What Can Blockchain Do and What Can it Not?”. As follows from the data of an analytical center China Finance Forty Forum, Xu Zhong, the chair of the Research Bureau at PBoC, is the author of the document.
There are several blockchain projects that are rather useful for society. However, we must not forget about the poor performance of blockchain, as well as its economic disadvantages. The technology requires constant analysis and experiments; it should be assessed objectively, the central bank states in the document, Zhong insists.
Forex East Money, a local media, reports that the PBoC publication provides an economic evaluation of the “tokenization” paradigm adopted by blockchain projects and considers tech aspects, including consensus mechanisms, smart contracts, and tokens existing in the blockchain ecosystem.
As previously reported, Chinese authorities are planning to open the first security testing center for blockchain networks.