Macau Monetary Authority Bans Banks From Engaging In ICO Markets

The banking and financial regulator in Macau has announced an effective ban on banks engaging in ICO markets and cryptocurrency services, in one of the most hardline stances to date adopted by a monetary authority.

The Macau Monetary Authority, which is the state’s primary financial regulator, announced that banks would be banned from engaging either directly or indirectly in bitcoin and other cryptocurrency markets, including facilitating ICOs.

The autonomous region of China’s decision mirrors the regulatory approach in China, which recently outlawed ICOs entirely on the mainland, describing the mechanism as an “illegal” mechanism for raising capital.

The policy was disclosed via a public announcement from the monetary authority, which spoke to the dangers of ICOs in their current form in laying out the ban for banks and payment institutions.

“Due to recent happenings of financing activities through issuance of tokens in the Mainland, financial institutions and non-bank payment institutions are prohibited explicitly by Mainland authorities from providing services for these tokens and virtual currencies. At the same time, this Authority also issued a notice on 20 September 2017 to remind all the banking and payment institutions in Macao not to participate in or provide, directly or indirectly, any financial services for the related activities.”

The announcement also pointed out earlier research by the authority, which held that bitcoin was not a legal currency, as it was fully unregulated, warning consumers and businesses to stay away.

“Any trading of these commodities involves considerable risks, including but not limited to those relating to money laundering and terrorism financing, against which all participants should remain vigilant.”

The decision of Chinese authorities to outlaw ICOs weighed heavily on cryptocurrency prices on its announcement, with many fearing the approach could spread to other countries worldwide, or could significantly dampen demand for key cryptocurrencies.

Now, with Macau following suit, there appears to be some momentum in Asia at least behind a more restrictive approach.

The decision reflects a sense of distrust in China over emerging fintech technologies, and in particular over initial coin offerings, which have come in for criticism from regulators across the world.

While most have stopped short of banning ICO activity altogether, the Macau approach will be monitored closely by regulators elsewhere, still searching for a model of regulation for the nascent nearly security of crypto tokens.