This is an English translation of the interview with the Dr. Hu Bin, Deputy Director-General of the Institute of Finance and Banking (IFB). The interview was broadcasted on CCTV-13, a national television channel in China. (Link here)
Transcript
Q: Since the beginning of the program, we mentioned that the 7 major regulatory bodies in China have combined efforts to halt Initial Coin Offerings (ICOs). So, what will happen once the halt to ICOs have been fully enacted? Is this a total ban on ICOs, or will ICOs be permitted again, sometime in the future?
Dr Hu Bin: In reality, this suspension of ICOs in China is merely a halt, rather than a complete ban. This halt is specifically targeted at illegal ICOs. The mechanisms that fuel ICOs inherently represent a real-life necessity, and there is a logical and rational explanation in using it. This particular move by the government, is to safeguard investors from being caught up in ICOs, as a form of speculative investment.
The next step is to begin the process of cleaning up illegal ICOs, and safeguarding investor interest. This can be done by drawing relevant boundaries within the crypto-sphere, clearly dictating who will regulate these ICOs, and how will these authorities carry out regulations. Only then, can we proceed onto the next phase of growth and expansion.
Q: Will the protection of investor interest, be detrimental to entrepreneurs? These technology startups have painstakingly innovated, and pioneered unique methods to raise capital and fund their corporate venture. Will this halt be harmful to entrepreneurs?
Dr Hu Bin: This scenario is entirely possible, but there are regulatory methods available, to respond to this scenario. Ultimately, this boils down to the question of how to balance financial entrepreneurship and innovation, with its associated risk. At this point, I want to call on Chinese authorities to setup a sandbox environment for safe testing of these new technologies. Once these companies are deemed to posses mature technology, they will be allowed to release the technology to the public market, for ICOs. Sandbox environments are an extremely powerful method to regulate innovative fintech companies, without stifling innovation. (I am an advocate for sandbox environments)
Q: For years, if one were to compare, financial innovation has always lagged behind technological innovation, and have perennially limit its potential for widespread adoption. How should these regulatory sandbox be setup, in order to maximise interest for both entrepreneurs and investors?
Dr Hu Bin: Firstly, reigning in of ICOs, and setting up regulatory rules for the execution of ICOs; Questions like which regulatory bodies will enforce these rules, who will evaluate the ICO processes, andhow to safeguard investor interest, have to be answered. After these conditions are in place, genuine ICOs with market value, and valid use-cases can be launched into the market, and allowed to operate normally.
Secondly, regulatory bodies have to improve their regulatory technology (RegTech), where technology can be used to determine risk in a timely fashion.
“Today, even as we discuss technological innovation and regulations, investors should possess clarity in thought when deciding to invest in ICOs.”
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I am a native speaker of Chinese, fluent in both reading and writing. Before this, I was involved in the White Paper translation of Antshares/NEO, and have done multiple translations for the NEO community. As much as I uphold excellence in my work, I cannot guarantee the accuracy of my translation.
Disclosure: The author holds NEO tokens.
