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China Will Likely Resume Cryptocurrency Trading by Licensing Bitcoin Exchanges


Oct 07, 2017 Posted /  2360 Views


China Will Likely Resume Cryptocurrency Trading by Licensing Bitcoin Exchanges

The Chinese government can probably resume cryptocurrency commerce within the coming months with necessary recognize Your client (KYC) and Anti-Money wash (AML) systems in situ.


Earlier in the week, Xinhua, the state-owned news publication of China, discovered that the Chinese government worries with criminal activities close cryptocurrencies like bitcoin. It stressed that cryptocurrencies became the “top choice” for underground economies and discovered that the govt can take applicable measures to manage the market by implementing a licensing program and strict AML systems.


Why the Ban on Chinese Exchanges isn't helpful for the govt


Last month, the Chinese government, the People’s Bank of China (PBoC), and native monetary regulators obligatory a nationwide ban on cryptocurrency exchanges. Consequently, the value of bitcoin fell to $3,000 and also the cryptocurrency market endured a significant correction.


Since then, the worldwide cryptocurrency exchange market has restructured because the majority of commerce volumes from China stirred to neighboring markets like Japan and Republic of Korea. a lot of to it, the japanese government formally approved eleven cryptocurrency exchanges within the same month, providing associate degree economical and well-regulated scheme for Chinese traders. As a result, the bitcoin value has recovered and has remained on top of the $4,000 margin.


But, the Chinese government’s ban on cryptocurrency exchanges additionally junction rectifier to the increasing commerce volumes of over-the-counter (OTC) markets and peer-to-peer commerce platforms like LocalBitcoins. For the Chinese government, such trend could be a major concern in terms of KYC and AML policies as a result of traders area unit currently ready to exchange cryptocurrencies and trade the Chinese yuan while not the management and also the involvement of Chinese authorities.


Previously, once regulated Chinese cryptocurrency commerce platforms like BTCC, OKCoin, and Huobi were around, the overwhelming majority of cryptocurrency trades were overseen by the PBoC through KYC and AML systems adopted by businesses at intervals the Chinese cryptocurrency exchange market. Today, it's out of the question for the Chinese government to manage cryptocurrency trades as a result of {they area unit|they're} being processed and settled in markets that are outside the reach of the native authorities.


Licensing Program almost like That of Japan probably


Xinhua noted that the govt is considering the chance of licensing and record-keeping cryptocurrency trades, as native sources together with Cn Ledger have shared. Cn Ledger, a trusty supply of cryptocurrency news in China, stated:


“Xinhua News, official agency of CN: Virtual currencies became the highest decisions of underground economies. we tend to shall adopt ‘0-tolerance policies’ towards crimes hidden beneath and take measures like record-keeping, licensing, AML processes, real-name, limiting giant transactions.”


In order for the govt to adopt a policy on cryptocurrency-based criminal activities, it has to have infrastructures in place which will permit the govt to supervise payments and disclose the identities of cryptocurrency users. while not KYC and AML systems, as seen in commerce platforms like LocalBitcoins and different over-the-counter markets, it's just about not possible to execute a policy on cryptocurrency crimes.


As Xinhua recommended, it's undoubtedly doable that the cryptocurrency exchange ban in China is merely temporary till the Chinese government releases a stricter record-keeping, licensing, and AML policies for commerce platforms.


“The ban did not stop them [Chinese investors] from buying cryptocurrencies. at intervals the previous few weeks, we have seen numerous terra firma customer's gap up accounts at TideBit.They still need to play the sport. I see a growing want therein they'll return to port or Singapore to shop for cryptocurrency,” same playwright Tsang, chief operative officer at TideiSun, the parent company of TideBit.


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Tags: Bitcoin regulations China Bitcoin regulation Chinaban China Bitcoin Ban

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