The vice governor of the People’s Bank of China, Pan Gongsheng, has said that the country’s regulators took the right decision in cracking down on domestic cryptocurrency exchanges.

Speaking at a financial book award event in Shanghai at the weekend, the central bank executive said it was “scary to think about” the scenario if the regulators had not stopped cryptocurrency exchanges from serving the local market, Yicai Global reports.

Gongsheng said:

“If we didn’t shut bitcoin exchanges and crack down on initial coin offerings [ICOs] a few months ago, and if more than 80 percent of the world’s bitcoin transactions and financing activities were still taking place China, which was the case back in January, what would it be like today?”

He continued to say that bitcoin speculation has caused financial market trouble, and that bitcoin is a bubble waiting to burst, like “tulip mania” in the 1600s and the dot-com crash.

Reportedly quoting from a book by Kedge Business School professor Eric Pichet, Gongsheng further said, “So there’s only one thing we can do – watch it from the bank of a river. One day you’ll see bitcoin’s dead body float away in front of you.”

The official’s comments echo those of Sheng Songcheng, an advisor to the central bank, who said in October that he supported the recent government crackdown on domestic ICOs.

“I fully agree with the move to ban ICOs in China, and the calls for refunds to be made to investors. In my opinion, these actions are largely aimed at averting risk and protecting investors’ interests while also being an opportunity to further regulate trading of virtual currencies,” Songcheng said at the time

China outlawed ICOs in early September, and in the following weeks the country’s cryptocurrency exchanges also said they would shut down due to regulatory pressure.

PBoC image via Shutterstock