Was it all FUD? Was China ever really considering banning Bitcoin exchanges or was it just people who were spreading rumours based on insufficient information. There were conflicting reports by exchanges, government officials and others.
These rumours were also perpetuated by some large organisations such as Caixin news agency in China and the Wall Street Journal / Bloomberg in the USA.
This caused large scale sell offs across the Crypto markets as many people believed that this would severely dampen the demand for crypto currency trading globally. Right after this was reported, there were snarky comments by Jamie Dimon who likened Bitcoin to a fraud. This further reinforced the decline in prices.
On the 13th of September, China's National Internet Finance Association (NIFA) released a statement that claimed currently, Bitcoin exchanges do not have the authority to operate. However, the Peoples Bank of China and NIFA have no intention of banning Bitcoin exchanges.
The eventual intention of these regulators is to release a licensing program that will provide the Chinese exchanges with the regulatory framework which will allow them to operate. One can therefore conclude that the exchanges will receive notifications to implement regulatory changes but will not be ordered to shut down.
Positive Developments?
This could be a positive development for the Crypto Currency market. If there are regulations that are instituted then it would give many of the people who are sitting on the side a new reason to invest in the crypto currency.
According to a number of local news publications in China, they believe that the ban will also only apply to those projects that are disreputable and are not up to industry standards. Some of the largest exchanges such as OKCoin, BTCC and Huobi will probably be eligible to apply for the licences when the government officially releases the new regulations.
Moreover, according to local news sources, the PBoC and NIFA have clarified that bitcoin is not being “banned” and the Chinese government will be providing further guidance in the upcoming months. If there are any Bitcoin exchanges that have not instituted the adequate Anti Money Laundering and KYC (Know Your Customer) protocols, they are at risk of falling foul with potential laws and could be suspended.
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