An Angel Investor and Founder of the Chinese app Meitu, Cai Wensheng, has criticized the central government’s ever expanding regulations on cryptocurrencies via Wechat. Mr. Wensheng has warned that harsh regulations may throw away the chance for China to maintain a powerful occupation in the global cryptocurrency arena. In addition to this, arguing that many of the challenges faced by cryptocurrencies are indicative of the typical “development process” experienced by emerging monetary forms.
Cai Wensheng has communicated his views about the Chinese government’s views on regulating the cryptocurrency mining and initial coin offerings. According to the Meitu founder, the majority of the world’s bitcoin mines are positioned in China, with Wensheng estimating that 80% of the world’s bitcoins are produced by hardware situated in China. Wensheng holds the belief that a crackdown and solely targeting bitcoin mining risks spoiling the chance for the country to maintain its influence in the bitcoin markets.
Wensheng has made the point of pointing out that many of the challenges and criticisms faced by bitcoin have been experienced by other emerging monetary forms throughout history, stating that “every coin is a kind of faith.” Mr Wensheng professes that many of the world’s national currencies have gone through countless periods of considerable volatility throughout history, claiming that political instability has lead to the dramatic price fluctuations for many sovereign currencies prior to 1973.
Mr Wensheng has also stated that “This is the case with the Golden Circle Certificates of the Republic of China.” adding the fact that instability is an innate component of the requisite “development process” experienced by emerging monetary forms.
Wensheng made valid points that initial coin offerings remove many of the awful barriers that are preventing ordinary investors from being able to have access to emerging companies, asserting that venture capital and investment firms typically access tokens at the same price as ordinary investors in the ICO markets.
When Mr Wensheng compared the ICO markets to the dot com bubble in the late 90’s/early noughties, making a point of saying that “hundreds of companies” that listed Initial Public Offerings in 1999 very few companies are now left, however. “One Amazon is enough”. Implying that heavy-handed restrictions on ICOs may result in China failing to accompany the growth of potential major companies that could emerge through various ICOs