The ICO bubble has been punctured and blockchain development will return to the right track

The final implementation of the regulation has shattered the dream of getting rich through the initial coin offering (ICO) that has been rampant for several months. This financing method for blockchain start-ups has been clearly identified as illegal financing, suspected of illegal sale of token tickets, illegal issuance of securities, illegal fundraising, financial fraud, pyramid schemes and other illegal and criminal activities. All types of token issuance and financing activities are required to be stopped immediately, and organizations and individuals that have completed token issuance and financing are required to withdraw. The wording is harsh and the attitude is firm.

It is worth noting that ICO as a financing method should not be confused with blockchain technology. The central bank’s announcement banned ICO but did not mention blockchain, which shows that its intention is not to restrict the development of blockchain, but to crack down on the speculative behavior hidden in it, weed out the weeds, and promote it to a healthier track.

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The original function of ICO was to raise funds for blockchain-related start-ups, which was limited to the geek circle. However, since this year, as the price of tokens issued by several related projects has risen dozens of times, ICO has gradually been packaged as a "wealth-making myth" and even began to attract "aunties" to enter. Many ICO projects, under the guise of blockchain, piled relevant concepts into white papers, bringing false prosperity to the blockchain industry and also brought huge bubbles. The various chaos that followed have harmed the interests of investors and caused the accumulation of financial and social risks.

However, as an emerging technology, blockchain itself is neutral. The reliability, real-time, and traceability of blockchain technology can be well utilized in the financial field. Especially in the fields of transaction payment, asset digitization, smart securities, clearing and settlement, customer identification, etc. In order to avoid the abuse of this technology, the National Internet Finance Committee has issued the "Compliance Blockchain Guidelines", which studies and regulates the compliance of blockchain from three aspects. Including regulating the key underlying technology of blockchain at the technical level, making it the cornerstone of the safe and reliable operation of the blockchain system; regulating the development of related businesses such as information disclosure, identity authentication, anti-money laundering, and regulatory docking at the business application level to prevent potential risks; at the regulatory level, explore regulatory technology based on blockchain to enhance regulatory capabilities.

From the perspective of blockchain technology implementation, Xue Hongyan, director of the Internet Finance Center of Suning Financial Research Institute, said that the main force driving the commercialization of blockchain has changed from small entrepreneurial teams to global financial and Internet giants, who do not need to raise funds through ICOs. In addition, real blockchain companies currently mainly gain profits by serving B-side giants, and do not need to raise funds through ICOs. In this sense, the banning of ICOs will not affect the commercialization of blockchain. Diversification of application scenarios is one of the most important factors driving the development of blockchain technology. At present, my country has the world's largest Internet application market, and the blockchain industry is expected to be at the forefront of the world.

Standardized supervision is essential for the healthy and long-term development of any industry, especially for emerging industries such as blockchain. However, it is worth noting that under the heavy supervision, whether blockchain entrepreneurs will really completely abandon the financing method of "token issuance" is still unknown. There are rumors that blockchain companies are planning to go overseas for ICO, and the new risks that may arise from this are worth being vigilant about.