Huo Xuewen: Dentralized Is Mistranslated
March 30 Beijing-In the “afternoon tea” event organized by the Internet Finance Museum, Huo Xuewen, the Party Secretary and the Director of the Beijing Financial Bureau, raised nine questions on the nature and source of value of blockchain, ICO and Bitcoin. He said that everyone was only concerned with speculating ICO and no one really cares about the value of the things behind ICO.
Huo Xuewen, Director of Beijing Finance Bureau (Credit:Museum of China Finance)
“We must prevent the fraudulent projects from using blockchain as the cloak of illegal financial activities. ICO has become a tool for scams. Token has become a concept to fool the public.”
It is worth noting that Huo Xuewen pointed out that it’s inaccurate and a translation mistake to understand blockchain as “decentralized”.
“After my research, I discovered that the translation of the concept is wrong. It is a serious mistake than the error itself. The ‘decentralized’ feature in the blockchain is not the so-called ‘decentralization’, but rather it means ‘distributed’, or it is a kind of “dimension reduction”
Huo Xuewen also pointed out:
“With current speed on blockchain, it is far from overturning the existing stock exchange transactions.” ” Trading of blockchain-based assets are mostly dependent on ID authentication on exchanges and still subject to traditional threats.”
When answering questions from the audience about “Whether token will be completely forbidden”, Huo Xuewen said:
If a technology must exist with token issuance, then which currency is the base currency and what is the use of the token? If it is not converted to fiats, then it is nothing. Tokens are issued for fiats. Someone translates token as a “general passport”. But it is still a token no matter what is being translated into. The nature of token never changes. My opinion is that if the blockchain does not get rid of the currency issue, it will never find a way for legal landing.
Huo Xuewen also talked about overseas regulation on ICO. He said that in China, ICO has been included in the scope of illegal financial activities and defined as illegal public financing.
“A lot of people said that United States has put ICO under SEC supervision, which means legalization. The conception is wrong. The United States has started to file cases to sue fraudulent blockchain projects. Japan has already banned exchanges from trading ICOs. All countries will not tolerate ICO fraud and scammer.”
Huo Xuewen stated on different occasions that he would strengthen the regulation and supervision of blockchain technology. At the first China Financial Technology Conference in July 2016, Huo Xuewen expressed two viewpoints. One is that the blockchain will become the bottom technology of fintech. Secondly,
“If blockchain technology is not regulated now, it will become the source of illegal financial activities.”
At the Beijing International Financial Expo held on January 26th, 2018, Huo Xuewen said that Beijing will crack down on virtual currency and blockchain fraud. In his speech, he emphasized:
“All blockchain companies must pay attention to risks and risk-control. They must not conjure concepts to deceive consumers. It may work for a while but won’t last. All fintech development based on blockchain must protect the interests of investors and we will not hesitate to crack down ICO fraud.”