(Yicai Global) Sept. 12 -- China's ban on fundraising through initial coin offerings (ICO) is necessary and timely. However, it should not obstruct the fintech companies or industrial organizations from studying blockchain technology, Sun Guofeng, director general of People's Bank of China (PBOC) Research Institute, told Financial News.

The ban on ICOs was due to its use in the illegal criminal activities, such as illegal currency sales, illegal security issuing, financial fraud, and pyramid schemes, Sun said in an interview with the newspaper.

The ban will not obstruct the relevant fintech companies and industry bodies and other technology companies from continuing their research into blockchain technology, which "itself is a good technology, and an ICO is not the only way through which one can carry out research into it," Sun said.

Therefore, blockchain technology, which wider than an ICO, can be applied in many fields, including social management. We need to expand our vision in research and development of blockchain technology, Sun suggested.

While there is already a sound regulatory framework for banks, it is relatively weak for technology firms which handle large streams of money flows, creating the risk of 'regulatory arbitrage,' Sun warned.