(Yicai Global) Aug. 28 -- China's central bank, the People's Bank of China, and the China Securities Regulatory Commission are discussing regulatory measures for initial coin offerings (ICO) of virtual currencies in the country and have not ruled out an outright ban, Caixin reported on Aug. 28.

The legal basis for any ban would be related to rules on illegal financial activities dating from 1998.

ICOs, which first emerged in 2013, have now become the mainstream financing channel for the virtual money market. They involve companies directly issuing currency through crowd-funding for projects.

China's virtual currency market is continuing to heat up this year. In the first half, there were 65 ICOs totaling USD393.9 million (CNY2.62 billion), data show.

As prices of virtual currencies soar, bitcoin trading and speculative risk are also on the rise. The development of ICOs is also facing multiple challenges and their supervision is expected to increase over time, said an official news outlet of China's central bank on Aug. 25.

The US Securities and Exchange Commission has previously included ICOs in its regulations, while the Monetary Authority of Singapore also recently spoke on the transaction risks associated with ICOs.