A new research paper from China’s central bank said blockchain doesn’t pose a threat to the global financial system but called for close oversight by governments of blockchain and related cryptocurrencies.

“So far, there has been no technology innovation that could overwhelm the modern financial system, and blockchain will not be an exception,” the article concluded. “Cryptocurrencies lack value and credibility granted by sovereignty, therefore can not jeopardize or replace legal currencies.”

The report from the People’s Bank of China (PBoC) research arm, which was issued on November 6 and titled “What blockchain can and cannot do,” comes amid continued scrutiny and control of the boom blockchain sector. On September 4, PBoC declared that Initial Coin Offering (ICO) activities and related services including community management are illegal in China.

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Runhua Zhao

Runhua Zhao is a technology reporter based in Beijing. Connect with her via email: runhuazhao@technode.com