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Bitcoin China’s developments
Editorial Team

Caixin’s report regarding a future shut down of local Bitcoin exchanges beard down a considerable hit to the Bitcoin market price.

Monday’s Asians news of banning on organizations financing through initial coin offerings (ICO-s), provoked a severe worldwide concern and a $200 decline in the price of Bitcoin. The fall was sharp, around 7% on Friday market data. However, it seemed not to be irreversible or threatening according to the analysts. The bad news followed the criticisms of the CEO of Chase Bank, James Dimon, who called Bitcoin “fraud”, and predicted a governmental rescue plan after the “bubble” cracking. The impact of Dimon’s statement on the “price shock” was not so clear. For instance, Blockstream CEO, Adam Back, claimed that Dimon is a “known” Bitcoin enemy, looking back to 2014.

Nevertheless, Dimon was not the only one who expressed a negative opinion about Bitcoin last week.

Another “tough language” statement was that of billionaire investor Howard Marks, who stated in an investor letter that he would not buy Bitcoins even if it used as a legitimate form of currency, as he firmly believes that it is about a new-formed “bubble”. According to Back, the reaction of China’s Regulatory was somewhat predictable, and its effects are downsizing. However, what happened to Chinese exchanges?

A strict statement of China’s National Internet Finance Association (NIFA), translated by Bitcoin.com, declared that the legal authority of Chinese cryptocurrency exchanges is removed from now on after some warnings to them. What is interesting here is that the ban of Bitcoin transactions is not being launched. NIFA and the People’s Bank of China (PBoC) stated that a licensing program to the Chinese exchanges would be formed to create a safer trading environment. For the present, the operation of Chinese exchanges will be influenced in that direction with new and stricter regulations. Of course, their service will not be banned or suspended.

Evaluating this movement, these rumors may finally have a positive impact on the Chinese exchanges. Government activation in the establishment of a regulatory framework will stimulate the performance of local exchanges, and in parallel create a sound platform to work within the country. Bitcoin.com wrote that these changes would be addressed to fraudulent projects that work out of the legal limits and rules. The primary exchange center of China like Huobi, OKOin, and BTCC are not imposed directly by the regulations, and their plans regarding licensing will be under consideration respecting the government’s official strategy towards the subject.

The main ascertainment from these developments is that the legality of Bitcoin was clarified by NIFA, PBoC, local financial regulators and regional news publication. Government acting towards the safety of the transactions and the Money Laundering prevention chose the suspension correctly, but until now, the nationwide ban is not on the table.

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