Bitcoin is reportedly to receive more harsh regulations from the People's Bank of China, the Financial Times reports.
Only several months ago, bitcoin advocates were claiming China was the future of the currency. However, the Chinese government is now considering closing bitcoin trading accounts, according to sources. This might seem unsurprising to some, as bitcoin is particularly good at getting around the capital controls and regulations through which China maintains its economy - leading to a clash of interests.
The chief executive of BTC China, Bobby Lee, said that closing bitcoin accounts "would be a bad thing for the exchanges". "But it is certainly within the realm of what the government is allowed to do. We are taking things one day at a time,” he added.
Digital crypto-currencies have already faced harsh regulations in China. In December, the government deemed bitcoin to be an online product rather than a currency and so barred Chinese financial institutions from conducting any bitcoin transactions. It also prohibited third-party payment providers from serving bitcoin exchanges. The new regulations would prevent China’s bitcoin exchanges from even holding corporate bank accounts, essentially making the currency illegal.
The price of bitcoin has fallen by nearly 60 percent from its peak in November 2013, and down 17 percent since Thursday alone, now valued at 2,950 yuan ($475) per coin.
According to the Financial Times, "the regulations to date have already undercut the Bitcoin market in China, with daily transaction volumes down by as much as 80 percent from their peak last year, according to industry estimates." News of these possible latest regulations will surely reduce volumes further.
0 User Comments