China Is Said to Ban Bitcoin Exchanges While Allowing OTC Trades

Lucy Hill
September 12, 2017

Momentum is rebuilding in China, despite the ongoing bitcoin exchange ban talks and the PBoC's supposed introduction of plans to suspend bitcoin exchanges indefinitely. China accounts for about 23 per cent of bitcoin trades and is also home to numerous world's biggest bitcoin miners, who confirm transactions in the digital currency.

In the past, the Chinese government has banned Bitcoin transactions at banks and retailers, and more recently it banned ICOs, Initial Coin Offerings.

BTC China, the second-largest exchange, has responded to the crackdown with its own statement.

"Trading volume would definitely shrink, " said Zhou Shuoji, Beijing-based founding partner at FBG Capital, which invests in cryptocurrencies, Bloomberg reported.

The currency went into freefall on Friday, after reports that China was about to ban cryptocurrency exchanges.

The media are reporting that China is now drafting a new resolution which will see Bitcoin exchanges banned in the country.

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A notice from the Banking Regulatory Committee led by the People's Bank of China announced on September 4 an immediate ban on ICOs. Bitcoin has shot up around 600 per cent in dollar terms over the past year, which has stoked fears of a bubble.

"There has been a general tightening of the screw on regulating financial and monetary conditions", said Mark McFarland, chief economist at Union Bancaire Privee SA HK in Hong Kong. Immediately after the imposition of strict regulations and policies on bitcoin trading platforms in 2016, investors stopped trading bitcoin at a premium rate within the Chinese exchange market.

China is home to vast and lucrative cryptocurrency mining operations for both Bitcoin, Ethereum, and other cryptocoins.

According to the The Wall Street Journal, bitcoin exchanges are now being clamped down on, with no trading to be done within Chinese borders.

China was once the world's largest Bitcoin marketplace, accounting for almost 90% of global trading. The country's three largest exchanges, OKCoin, BTC China and Huobi, which together account for 60% of Chinese Bitcoin trading, have all suspended trading on their exchanges. Buying Bitcoin was a way to bypass those rules.

Other reports by TheDailyFarc

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