The situation in China is worrying many in the cryptocurrency community, but is there really anything to fuss about?
Last weekend, Chinese regulators moved to ban ICO fundraising within the country, effectively removing several alternative cryptocurrencies from the Chinese market. Now, one week later, the international cryptocurrency markets have already started to restabilize. General support for fintech does not seem to have wavered, despite the ban. Even within China, ICO investment continues.
In order to find out why the ICO ban in the world’s second-largest economy has had such a small effect, we contacted Mikhail Mikhailov, CEO of blockchain-based marketing platform DS Plus (http://dsplus.pro/), who has been monitoring the situation closely. Mikhailov has a lot of experience with Chinese ICO investment and has not seen a big change since the enactment of the ban.
Mikhailov said: “In China, ICOs were banned only for those legal entities existing outside of the financial market – there was, in fact, no blanket ban of ICOs in China.” In Mikhailov’s opinion, volatility in the cryptocurrency market is dependent on what is said in the press. He believes the establishment press has been taking advantage of the situation in China to increase readership and to delegitimize cryptocurrency. But the attempt to delegitimize fintech is not working. ICO investment continues to occur in China, and Chinese investors continue to invest in ICOs internationally.
In the words of Mikhailov; “weakness in the cryptocurrency ecosystem is directly dependent on the information that is available. Therefore, problems in the ecosystem can be attributed to the ill-intentioned efforts of the press to negatively affect the cryptocurrency exchange rate, and make things worse in the fintech world.”
The cryptocurrency markets have already bounced back and investors from China continue to be interested and participate in ICOs. Interest in fintech is as strong as ever, and it is continuing to be the future of startup funding, even in China.
So what’s actually happening in China?
- A temporary ban on unauthorized ICO startups: ICOs on the Chinese market with authorization continue to seek and receive funding. The current situation of a ban on new ICOs is only temporary
- A dip in BitCoin prices: Stabilization has already been achieved. Investment in other cryptocurrencies continues.
- Regulatory agencies are reviewing options on how to better control ICOs within China. This is merely a measure to reduce the number of ICOs perceived to be scamming investors in China.
Chinese ICO Interest Remains Strong
Mikhail Mikbailov chooses to look at things realistically: “You have got to remember that in China, they do things differently. There, the government has much tighter control over private enterprises. It seems that Chinese financial regulators have chosen a development strategy for blockchain technologies which is in the government’s interest. For the Chinese government, the traditional way of investing in block-chain startups with an ICO and with speculation seems far too risky.”
Private institutions and individuals in China continue to show a lively interest in ICO investment. One example of such interest is the recent joint strategy meeting between teams from China’s Alibaba Group and the Russia-based ICO PlusCoin (https://pluscoin.io).
The latest news of the ICO market in China and some other countries were discussed at a meeting. The representative of Alibaba Group, Alex Zhang, shared his opinion why such sentiments appeared in China: “There were too many scams in China, so many people lost their money”. CEO of PlusCoin project, Mikhail Mikhailov, has also shared his vision on this news: “They do things differently in China. Governments and businesses are deeply integrated there. Probably, China has chosen other development patterns for the blockchain technologies, that’s why the traditional ICO and speculation on cryptocurrencies can impose additional risks for them. However, we are writing history altogether, and future of the humanity depends on which exact step we are taking now. ICO is one of such steps.”
DS Plus project, its possibilities, and benefits for the people and enterprises were also discussed during the meeting. The commodity and money infrastructure, which is being created by DS Plus (PlusCoin) team, was a central theme of the conversation. DS Plus is a brand new system using instant transactions between application users and partner companies. All the transactions are carried out in the PlusCoin cryptocurrency. The representatives of Alibaba Group admitted that they liked the idea and saw many opportunities to use it.
It was the first meeting between the parties and as the team hopes not the last. Perhaps, the next meeting between the DS Plus and the Alibaba Group will take place in China. DS Plus app already works with AliExpress online retail service which is run by Alibaba Group as well.
Mikhailov sums up the situation as such: ”We, members of the cryptocurrency community and the Chinese, are writing history together. The future of humanity depends on what steps forward we are taking now. The ICO model is one of the steps that must be taken for progress to occur.” It seems the folks at Alibaba agree.