China’s often-rocky relationship with cryptocurrencies has entered a new chapter after a Chinese fintech watchdog vowed to step up oversight of initial coin offerings (ICOs).
The Chinese National Internet Finance Association (NIFA) announced in an annual meeting on February 9 that the body expects ICO regulation and policing to become one of its main duties in 2018.
NIFA was created in 2015 by the People's Bank of China (PBoC) in partnership with banking and securities regulators and approved by the State Council, the chief administrative authority in China. The association was initiated as part of an effort from the Chinese government to monitor emerging digital fintech products, like peer-to-peer lending and cryptocurrency.
The association’s ability to enforce any new ICO rules is not certain, as NIFA is a self-regulatory organization and not a regulatory authority. However, it was mandated to monitor and oversee developments in the sector as part of a special effort in 2017, including “special monitoring projects” and “issuing warnings on virtual currencies, ICOs, and disguised ICOs.”
Now NIFA’s scope of work appears to have expanded to becoming a general industry watchdog. NIFA expects to “normalize and standardize” the monitoring and oversight performed last year to become standard operating procedure.
ICOs are currently banned in China, as are cryptocurrency exchanges, but Chinese citizens may be able to access cryptocurrency services through foreign platforms. NIFA’s increased mandate signal a step in the direction of regulation and legalization in China.