Over the past few weeks, China has implemented regulations across all bitcoin exchange operations within the country. This, in turn, has caused a significant drop in trading volumes within the region. Some people speculate that Chinese bitcoin traders are now going abroad finding friendlier overseas entrances to bitcoin exchanges.
Some View China’s New Bitcoin Regulations as Friendly, While Others Say the Rules Severely Limit Chinese Markets
According to reports, the People’s Bank of China’s (PBOC) new regulatory policies are affecting Chinese bitcoin traders. The decision to cease margin lending, add fees to every trade and pausing withdrawals has led to Japan taking the lead in global bitcoin trading volume. However Chinese bitcoin trader Lin Qi (pseudonym) tells the China Business Journal (CB) he is optimistic and traders should maintain their holdings rather than sell. To outsiders, Lin Qi says the situation looks dismal, but to him, the PBOC’s attitude toward bitcoin is still friendly.
Moreover, a veteran bitcoin business owner in China, Li Qian (pseudonym), told CB that bitcoin turnover rate in China used to be high but now due to regulations things have changed a great deal.
“You should view the impact of this regulation storm from both the upstream and downstream directions of the business,” explains Li Qian. “For the those at the upstream direction, i.e. the bitcoin miners, they are not affected. Chinese miners continue to mine as usual. Our electricity and labor cost are always cheap. The most affected is the trading aspect of Bitcoin (exchanges). Currently, the impact of the Chinese market in the world has declined a lot, especially after charging fees, our turnover rate is now severely limited.”
Japan Takes The Lead
Over the past few months, Japan has become a big player within the bitcoin economy. According to an employee from one of the top Chinese bitcoin exchanges, the upcoming Japanese regulations will encourage Japan’s trading volume lead. Japan’s bitcoin regulations are also viewed by regional exchanges as progressive and will help maintain Japan’s position in the cryptocurrency economy.
“The Japanese Yen market is now adopting zero fee policies, and became the new leader,” a Chinese bitcoin exchange employee tells CB. “Compared with other countries, Japan seems more friendly to digital currency. Also, the new regulation methods will be effective; Bitcoin will be a legal way of payment.”
Over the past few months, Japanese exchanges like Coincheck, Bitflyer, and Zaif have had a significant influx of bitcoin traders. Furthermore, the Japanese-based GMO Internet group plans to create an exchange as well adding to the growing list of bitcoin exchanges within the region.
What’s In Store for the Future of Cryptocurrencies In China?
People are also speculating another reason the PBOC may be regulating bitcoin more strictly. According to a recent report by Bloomberg, some think the new policies may correlate with an upcoming PBOC cryptocurrency. In January 2016, China’s central bank detailed it was working on a prototype of its own and will have a developed virtual currency in the near future. The Bloomberg report details the central bank cryptocurrency is being advocated by senior officials in the region such as the PBOC deputy governor Fan Yifei.
Many people wonder what will happen to the bitcoin industry after all of these new regulations, inspections, formed alliances and closed door meetings. Li Wei, a researcher at 21st Century Research Institute, explains to CB that Chinese regulators are not encouraging bitcoin adoption, but are also not forbidding it. Wei believes the technology itself is beyond country borders and in the long run, it will be difficult for the nation state’s regulators to effectively manage it.
What do you think about the future will be for bitcoin in China? Let us know in the comments below.
Images courtesy of Shutterstock, Bitcoin.com, and Pixabay.
Do you want to vote on important Bitcoin issues? Bitcoin.com has acquired Bitcoinocracy, and rebranded the project to Vote.bitcoin.com. Users simply sign a statement with a non-empty Bitcoin address and express their opinions. The project focuses on determining truth backed by monetary value and transparency.
Use Bitcoin and Bitcoin Cash to play online casino games here.