Things are changing in China as far as Bitcoin exchanges are concerned. Over the course of the past few weeks, China’s central bank has been inspecting and regulating the country’s top cryptocurrency exchanges. The event has caused a significant shift in Chinese Bitcoin trading causing Localbitcoins volumes to grow exponentially while exchanges in China make changes to their business model.
Also read: Hedge Funds Are Buying Mt Gox Bitcoin Claims
Inspections & Policy Changes
It all started in the first week of 2017 when Chinese officials from the People’s Bank of China (PBOC) began inspecting the country’s local Bitcoin exchanges. At the time it was shrugged off by the Bitcoin community as the Chinese exchange BTCC’s founder Bobby Lee detailed it was business as usual. However, the top three leading exchanges began publicly stating new exchange policies which included ending margin lending and adding fees to every trade facilitated.
“Market makers and takers will both be charged a flat fee of 0.2 percent per transaction,” explained BTCC at the time. “We are implementing fee-based trading to curb market manipulation and extreme volatility.”
Following these initial inspections by the PBOC and the top three Bitcoin exchanges, word broke out the bank was also visiting with nine other exchanges. The PBOC’s recent statement revealed the bank was looking for illegal activities and technical risks. The central bank warned exchanges were not to allow margin lending practices and money laundering. The news didn’t seem to stir the Bitcoin community or price at the time. But the following day was a different story.
Even More Changes
On February 9 the exchanges Huobi and Okcoin announced they were suspending BTC and LTC withdrawals for one month. The news seemed to resonate with Bitcoin trading markets as the price slid 10 percent that morning. Bitcoin’s fiat value has rebounded since that time, and many believe China’s grasp on the market is grower weaker.
Meanwhile, smaller exchanges in China such as Btctrade, Yunbi and others have started to strengthen withdrawal reviews. Other Bitcoin trading platforms like Bitbay, Chbtc, and Yuanbao have temporarily suspended withdrawals. Chinese Bitcoin trading volumes have dropped significantly since these new policies took effect while the price continues to remain high.
Now, this week the Chinese Bitcoin exchange and mining company HaoBTC has revealed it will be ending its exchange services. The company will be focusing solely on its mining efforts, online wallets and leaving the bitcoin trading business entirely. Moreover, after all these Chinese exchange revelations, Localbitcoins volumes have exploded.
All eyes will continue to remain focused on further changes within China’s bitcoin exchange industry.
What do you think about the new changes to Chinese bitcoin exchanges? Let us know in the comments below.
Images courtesy of Shutterstock, Coin Dance, and Twitter.
What’s the quickest way to see the current bitcoin price in your local currency? Click here for an instant quote.