China May Slap Brakes on Bitcoin

China May Slap Brakes on Bitcoin

China May Slap Brakes on Bitcoin

Caixin reported that China was planning to shut down local crypto-currency exchanges. On Monday, Bloomberg and the Wall Street Journal issued similar reports, saying that China was drafting a plan to ban commercial trading of all virtual currencies.

Bitcoin was trading lower by around 1.6 percent at $4,160.

Speculation over a crackdown on cryptocurrencies in China is rife due to a recent decision by The People’s Bank of China (PBOC) to outlaw the practice of raising funds through ‘initial coin offerings’ (ICOs).

ICO fundraising has experienced a surge in popularity in China, with 65 IOCs raising a total of 2.62 billion yuan ($394.6 million) from over 100,000 individuals since the beginning of the year.

Pursuant to the PBOC decision, individuals who have already completed fundraising should make arrangements to return the money.

China has boomed as a cryptocurrency trading venue in recent years as its domestic exchanges had previously allowed users to conduct trades for free, attracting investors and speculators who boosted demand and encouraging volumes.

However regulators started taking a closer look at the industry in January this year and have since rolled out a series of rules for the industry including forcing exchanges to slap on trading fees and requiring them to strengthen oversight of customers’ identities.

China’s largest bitcoin exchanges said on Monday they were still awaiting clarification from the government following more media reports that Beijing was planning to ban trading of virtual currencies on domestic exchanges.

In Russia

Russian Finance Minister Anton Siluanov reassured Russian fans of Bitcoin and other cryptocurrencies that the government has no intention of outlawing cryptocurrencies.

“The state understands indeed that crypto-currencies are real. There is no sense in banning them, there is a need to regulate them,” the minister said.

Instead, the Russian financial authorities are now working to bring operations with cryptocurrencies into compliance with Russian law. The legislation, to be ready by the end of the year, envisions registration of would-be buyers and a clear definition of buying procedures and rules of circulation.

Explaining the need for tighter regulation, Siluanov pointed out that those investing in virtual money are subject to greater risks due to the lack of external regulation.

“We must make an organized market out of the black market,” he said.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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