Hong Kong - The Emerging Winner of China's Bitcoin Ban?

20 September, 2017, 06:04 | Author: Leticia Walters
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All Bitcoin exchanges in Beijing and Shanghai have been ordered to submit plans for winding down their operations by 20 September.

The global value of Bitcoin has plunged in recent days amid speculation that Chinese authorities would shut down the trading platforms following a ban on initial coin offerings (ICOs) earlier in the month. "In accordance with regulatory requirements, the trading platform shareholders, the actual controller, executives, financial executives [must] fully cooperate with the relevant work in the clean-up period in Beijing".

The authorities require the stakeholders of the exchanges to remain in Beijing during and after the closure. He also stated that younger investors-particularly those under age 30-believe that bitcoin makes "perfect sense" as an investment vehicle.

As far as official statements go, Bitcoin itself is not banned in China.

"They're shutting it down for now, but it doesn't mean that in six months or so they won't create new Bitcoin regulations like Japan and Australia did", he said. It is because some other countries took the same path only to come up with new regulations for the currency. The bank figured out that banning cryptocurrency would reduce the financial risks that it faced.

"Bitcoin is by proxy unregulated and peer-to-peer, it's a very volatile currency". Some people criticized the move.

India is soon coming up with its own cryptocurrency called "Lakshmi" and no, this is not a fake news!

A website set up by the Chinese central bank warned that cryptocurrencies are "increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising". It also required that they inform the users publicly when they end the operations. Bloomberg (among others) reports that exchange operators made a decision to close down after in-person meetings with PBOC officials, and the Wall Street Journalreports - based on anonymous sources - that the PBOC has prepared a set of "draft instructions" that would ban cryptocurrency trading altogether. If they can do this earlier, they can maintain a good chunk of the client pool that they have.

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