Chinese Communist Party Issues New Warning on Blockchain Speculation
The flagship newspaper of the Chinese Communist Party has published a new article warning readers of the perils of speculative investment in blockchain related stocks.
According to the article published by the People’s Daily entitled “Three Questions on Blockchains” (三问区块链) blockchain technology “currently isn’t that mature, and caution is needed when it comes to related speculative investment.”
“We especially need to distinguish between technological innovation and fund-raising innovation, and not use blockchains just for the sake of it,” said the article. “Blockchain technology can certainly create great value, but there are also some risks which cannot be overlooked.”
The People’s Daily article follows the recent publication of a similar editorial by the state-owned Xinhua News Agency in January, as well as the suspension of a number of blockchain-related shares by both the Shanghai and Shenzhen Stock Exchanges, and the issuance of official warnings to investors about the perils of speculative investment.
The message consistently sent by the Chinese authorities on the issue of blockchain technology has been one of support for ongoing research and new applications, yet the need for caution in relation to potential investment risks.
“Over the past few years, the blockchain development ecosystem has gradually improved and become richer,” said the article.
“Industry insiders believe that given the support of government policies, and after obtaining widespread attention and capital support, blockchain technology can achieve steady and gradual progress.
“While the prospects for blockchain technology are immense, we still need to maintain a calm head.”
The People’s Daily quotes He Fei (何飞), senior researcher with the Bank of Communications Financial Research Centre, as saying that “areas of application are still limited, and greater caution is needed when it comes to speculation on capital markets.
“It’s inevitable that behind the blockchain wave there will be some companies that want to rile things up and engage in speculation.
“They do not engage in real business operations, but are only attempting to make off with money from the capital markets.
“We need to be careful about ‘bad money driving out good money,’ and this causing organisations who want to engage in real business to withdraw from the market, affecting the adoption of blockchain technologies.”