The report seeks to prevent people from falling in cryptocurrency scams, while the country is preparing its Central Bank Digital Currency (CBDC)
The People’s Bank of China (PBoC) in the city of Shanghai recently published a report with a warning about cryptocurrency scams. The financial institution indicated the number of crypto scams that those who invest in blockchain technology and digital currencies can suffer.
The warning refers to a set of examples related to some known crypto scams within the crypto industry. Besides, this report suggests not investing in this type of digital asset.
According to the warning that the bank published on the QQ web platform last May 12th, there are several ways to detect scams in the crypto world. For this reason, the bank created a total of 16 responses to the most common questions that may arise if users suspect that a crypto-business is a scam.
The article also points out other scam methods that scammers carry out from traditional mechanisms. However, the PBoC emphasizes that users must take special care when they are analyzing a business which includes blockchain technology or digital assets.
Although the article details that scammers still using traditional mechanisms, the increase in the crypto scam is not ruled out. The article also focuses on explaining what an illegal tax collection means, as well as the different ways to avoid and detect it.
Due to the explicit ban on the use of crypto assets that China approved in 2017, it was not possible to specify or name digital currencies and Initial Coin Offerings (ICOs). But most of the signals that the article describes are similar to the methods and ways of managing cryptocurrencies.
Some of these examples mention that, currently, one of the most common scams is related to the sale of “equal division of assets, advice, and the disposition of shares”. This scam suggests the method of tokenization of parts or shares in real estate. As mentioned, the article does not point to blockchain technology. However, it does seem to allude to it.
China and Cryptocurrencies
The Chinese government maintains a strong stance against the use of cryptocurrencies. On many occasions, the government issues statements remembering that the use of crypto assets is illegal in the country. Despite this, China is home to one of the highest levels of Bitcoin (BTC) hash in the world. This factor indicates that the movement of that digital asset in the country is substantial.
The legal loophole that surrounds cryptocurrencies in China generates that some cybercriminals avoid legal penalization. The country has to recognize cryptocurrencies as goods to penalize these criminals.
Despite this position, the PBoC continues to carry out tests on a blockchain platform that would serve as the basis for multiple functions. One of the plans in China is supporting the technological apparatus of the Central Bank Digital Currency (CBDC) that very soon may begin to circulate in a pilot test that includes companies like Mc Donald’s and Starbucks.
China will also use blockchain technology to build a cross-border trading platform that could well start operating on Hainan Island, as well as in other outstanding projects.
By María Rodríguez