 "China'a bitcoin exchanges awaiting approval after reports of plans to ban virtual currency trading")
China’s largest bitcoin exchanges are awaiting clarification from the government following more media reports that Beijing is planning to ban trading of virtual currencies on domestic exchanges, but markets were largely subdued on 11 September.
[caption id=“attachment_1410599” align=“alignleft” width=“380”] Representational image: AFP[/caption]
Spokeswomen for the OkCoin and Huobi platforms told Reuters they had no information to share following a report by Chinese financial publication Caixin that sent the price of bitcoin down 6.6 percent on 8 September.
A source with knowledge of the policy confirmed to Reuters that China planned to ban exchanges that allowed virtual currency trading. BTC China, also one of China’s three largest exchanges, and China’s central bank did not immediately respond to Reuters’ requests for comment.
Bitcoin was trading lower by around 1.3 percent at $4,170 on the Bitstamp platform on 11 September. On Sept 2, it hit a record high of nearly $5,000.
“People are still waiting for official word from the regulator,” said Arthur Hayes, chief executive of crypto-currency trading platform BitMEX, adding that the relatively subdued fall in the bitcoin price illustrated how opinion in the community towards the Caixin article was divided.
“I would assume that if China shuts down trading on continuous order books of the large exchanges, the price would drop below $4,000, or the price of the U.S. dollar price of bitcoin would catch up to where it’s trading equivalently in China,” he said.
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.
Last week, the central bank moved to ban so-called “initial coin offerings”, or the practice of creating and selling digital currencies or tokens to investors in order to finance start-up projects.
Bitcoin is currently trading at a discount on Chinese exchanges compared with their U.S.-based counterparts. On 11 September, bitcoin was up by 6.5 percent at 25,253 yuan ($3,871.67) on the Huobi platform.
However, on China’s Twitter-like Weibo platform, some users said they were withdrawing some of their bitcoin investments, while others fretted over how long some platforms were taking to return their cash after requesting withdrawals.
Aurélien Menant, founder of Hong Kong-based cryptocurrency exchange Gatecoin, said that the platform had experienced a surge in the number of registrations from mainland Chinese clients over the weekend and also received a “massive number” of inquiries from Chinese token founders looking to list on Gatecoin following reports of China’s ban.
A China-based cryptocurrency investor, however, said he was doubtful that Chinese authorities could completely suppress cryptocurrency trading. “I think there is too much money to actually stop people from trading…The best they could do is ban exchanges but people will just use VPN or find another way”
