The People’s Bank of China (PBOC), the country’s central bank, has declared an immediate ban on initial coin offerings (ICOs) and has asked all related fundraising activity to be halted immediately.

ICOs, which use blockchain-based technology, are digital token sales for new cryptocurrencies. They have experienced unchecked growth over the past 12 months, raising $1.6 billion worldwide. China now views ICOs as a threat to the Chinese financial market, as authorities struggle to control financial channels that operate beyond the traditional banking system.

In the bank’s directive, it stated that “the tokens used in coinage financing are not issued by the monetary authorities, do not have legal and monetary properties such as indemnities and coercion, do not have legal status equivalent to money, and cannot and should not be circulated as currency in the current market.”

It goes on to state that any organisations or individuals who have completed such financing should make arrangements to refund the transactions.

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