China’s feelings towards cryptocurrency have been fairly well documented since they initially took against the asset class in 2013. Back then the PBoC banned banks from handling cryptocurrency transactions, since when they have banned crypto exchanges and ICOs, and now it seems they are planning to go one step further – banning airdrops.
When is an Airdrop not an Airdrop?
Airdrops, when coins are given out for free in order to raise awareness of a project, are common in cryptocurrency, but a report by the People’s Bank of China (PBoC) released last week suggests that the reason for the crackdown on this mechanism in particular is because they are being used as covert ICOs; the airdrop goes ahead, but a huge chunk is held back and then sold when the price increases. The report also claims that up to July 18, 2018 there were as many as 65 token sales carried out in China, raising $377.3 million, with around 105,000 investors participating. Since token sales are banned, as is the use of cryptocurrency in general, this is a surprisingly high number which shows that China still has some way to go before it can achieve its desired goals. The PBoC acknowledges as much in the report by stating that it needs to coordinate with other agencies in order to achieve a more holistic approach to the mammoth task.
No Change in Sentiment
Hopes were raised last month that China’s stance on cryptocurrency was softening when a local court ruled that Bitcoin should be classed a property, but this was in relation to an isolated case and had no bearing on any other aspect of the government’s thinking. Despite being interested in blockchain as a concept, the Chinese government are very much against non-state operated financial mechanisms and have proved time and time again that they act quickly in putting measures in place to try and halt progress int such a direction.