Skirting the Great Wall, Part Three: The Paradox of Cryptocurrencies in China

Next month marks the fifth-anniversary of the People Bank of China (PBoC)’s very first crypto regulatory intervention, with the issuance of its ‘Notice on Precautions Against the Risks of Bitcoin’ in Dec. 2013. Over the years, the Chinese authorities have cemented an increasingly hardline stance, as their perception of the financial risks posed by crypto has hardened.

Their action has spanned the notorious criminalization of initial coin offerings (ICOs) in Sept. 2017, followed by a series of stark measures that target crypto trading platforms, third-party crypto payment channels, social media networks, and offline crypto-promotional events.

Just this month, the PBoC announced it had widened its regulatory scrutiny to include token airdrops, which it characterized as “disguised” ICOs in its latest annual financial stability report.

Days later, the central bank issued a working paper