A senior central bank official from the People's Bank of China has called for clarity in the regulation of the bitcoin industry.
According to a report, a central bank official has stated that China should bring clarity toward its regulatory and supervisory authority of bitcoin exchanges in the country.
Today, a central bank official has reportedly been quoted with saying that China ought to make clear its supposed “bottom line” in its supervision of bitcoin exchanges in the country. A Reuters report cites regional newspaper China Business News quoting the People Bank of China’s Zhou Xuedong, the director of the business management department at the country’s central bank.
Zhou, who is also a delegate of the central bank to the national parliament, has also reportedly called for a ‘negative list’ of bitcoin exchanges in the country as a means to reducing financial and market risks.
Two months back to this very day in January, the PBOC weighed in on exchanges’ trading activities in China, picking China’s ‘big three’ exchanges to look into ‘abnormal price fluctuations’ of the cryptocurrency. At the time, bitcoin was soaring above $1,100, closing in on the then all-time high of $1,163 on the Bitstamp Price Index (BPI). In China, major exchange BTC China recorded an all-time high price at CNY7,990.
The PBOC’s involvement, which included meetings with officials from BTC China, Huobi and OkCoin, sent prices tumbling. On January 11, the Shanghai and Beijing branches of the PBOC conducted “on-site checks” of the three bitcoin exchanges, sending prices crashing again. Exchanges in the country began enforcing sweeping changes, beginning with halting leveraged or loan-based trading of the cryptocurrency between platforms a week after the PBOC became involved. On January 24, Chinese exchanges put an end to zero-fee trading and began charging a flat 0.2 percent fee of the value of the transaction.
The central bank continued its investigation of Chinese bitcoin exchanges in February. A closed-door meeting with a number of domestic exchanges including the ‘big three’ in the country took place on February 8. The following day, a public announcement by the central bank revealed further details and insights about the ‘closed-doors’ meeting. A total of 9 local exchanges’ representatives attended the PBOC meeting, with central bank officials reminding exchanges to operate within legal and regulatory guidelines, warning them that any violation would result in the closure of an exchange.
A day later, bitcoin prices took a steep tumble as two of China’s biggest exchanges, OkCoin and Huobi, paused withdrawals for a month following regulatory pressure by the PBOC. BTCC followed suit soon after.
The central bank’s new requirements resulted in some trading platforms like HaoBTC shutting down its exchange operations entirely.
The above-mentioned regulatory moves by the PBOC are actions taken toward bitcoin exchanges this year alone. Despite its obvious involvement, the central bank has not laid out any clear set of regulations upon the bitcoin industry in the country.
Alongside his notable quotes in relation to bitcoin exchange supervision today, Xuedong has also called for China to look at regulatory efforts toward bitcoin internationally to establish a regulatory mechanism for the industry.
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Last modified: January 26, 2020 12:04 AM UTC