Virtual Currencies Expected to be Regulated in China on October 1st
Chinese media outlet Jinse.com has reported that laws governing the use of virtual currencies in China will be enacted on October 1st 2017. Jinse states that Chinese cryptocurrency regulations were incorporated into the nation’s “General Principles of the Civil Law of the People’s Republic of China” legislation, which was voted on and passed on March 15th.
Also Read: Chinese Bitcoin Exchange Executives Allegedly Must Remain in China
Virtual Currencies Are Expected to Be Legislated As “Virtual Property” From October 1
Jinse has reported that the General Principles of the Civil Law of the People’s Republic of China, which is expected to come into effect on October 1st, will see Chinese cryptocurrency regulations implemented for the first time. The Jinse report suggests that cryptocurrencies will be treated as “virtual property” under Chinese law. Chinese academic, Professor Deng Jianpeng, stated that “bitcoin, [crypto]currency, etc. can be classified as virtual assets.”
The incorporation of virtual currencies into China’s “General Principles of the Civil Law” legislation suggests that China’s recent crackdown on virtual currency exchanges will not be expanded into a nationwide prohibition on the use and possession of cryptocurrencies. Jinse reinforces this inference, stating that “regulators have never mentioned the issue of prohibiting bitcoin from beginning to end, that is to say, the government level does not think that there is a problem with the bitcoin itself”- according to a Google translation.
Jinse asserts that the crackdown on exchanges was motivated by “small platform[s]… not seriously implement[ing] anti-money laundering and KYC policy” requirements. The publication also cites the decision to allow China’s major cryptocurrency exchanges to reopen following PBOC investigations, implying that the recent crackdown on cryptocurrency exchanges is temporary, and should not be interpreted as a general prohibition on cryptocurrency.
Two Chinese Bitcoin Exchanges Will Be Operational When the Legislation Comes Into Effect
At the start of the month, news.bitcoin.com reported the Chinese government announcement to extend its ban on ICOs and mandate the closure of all cryptocurrency exchanges operating in China. All exchanges were required to shut down their operations by October 1st. However, reports emerged stating that Okcoin and Huobi would be permitted to continue to operate until the end of October.
This week, leading bitcoin exchange BTCC stopped accepting deposits in Yuan and cryptocurrencies. Although the exchange will stop all trading operations by September 30 2017, BTCC has stated that it will continue to process withdrawals until October 31 2017. The Chinese government’s decision to cease the operations of all cryptocurrency exchanges except for Okcoin and Huobi right before the nation’s virtual currency regulations are set to come into effect, has led to speculation that the surviving exchanges may be the only cryptocurrency exchanges permitted to operate in China moving forward.
Do you expect new Chinese virtual currency exchanges to emerge after China’s new legislation? Share your thoughts in the comments section below!
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