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Bitcoin Exchanges Won’t be Prohibited, Will see Strict Supervision: PBOC Official

Last Updated March 4, 2021 4:54 PM
Samburaj Das
Last Updated March 4, 2021 4:54 PM

A senior Chinese central bank official who leads the department investigating bitcoin exchanges has revealed telling insights into authorities’ current stance on the bitcoin industry in China.

Since the turn of the year, the People’s Bank of China (PBOC) has taken a notable interest in the local bitcoin industry. The bank’s officials have spoken to representatives from the big Chinese exchanges, conducted ‘on-site inspections’ of these exchanges and have wielded their authority to force the industry into making a handful of notable changes.

Putting an end to zero-fee trading and margin (loan-based) trading are two notable features that Chinese exchanges no longer offer in an industry shake-up. Further, exchanges have been forced to implement AML (anti-money laundering) and KYC (know your customer) infrastructure that the central bank found lacking, previously. This move has led to the ‘big three’ Chinese exchanges temporarily suspending bitcoin withdrawals for a month.

Yesterday, CCN.com reported on quotes coming out of China from Zhou Xuedong, director at the PBOC’s business management department, the same department that lead investigations into bitcoin exchanges since January. The official called for the ‘bottom line’ on supervision of exchanges to provide clarity about regulators’ stance on the operations of trading platforms in China.

Perhaps pointedly, the official called for a ‘negative list’ of exchanges, presumably those that were falling out of line with the PBOC’s renewed anti-money laundering guidelines and regulatory policies.

More quotes and details of the central bank’s stance on bitcoin exchanges have now been revealed, with Xuedong calling for an inclusive attitude toward bitcoin exchanges rather than an outright and temporary ban.

In quotes reported on social media , Xuedong is quoted as stating:

[The regulators] shall adopt a forgiving attitude, not prohibit (the exchanges) for the time being, and set an observation period.

Xuedong also suggested that authorities do risk prevention and mitigatory work in the short term while supervising exchanges. In the longer term, the central bank official deems it necessary to look into the outcomes of international regulatory efforts over the bitcoin industry with the ultimate goal to implement regulations in China.

Further, Xuedong has also reportedly  called for the ‘strict supervision’ of bitcoin exchanges, in the short term.

A few regional publications in China reported on these quotes. Roughly translated versions, via WallStreetCN reveal:

Hat tip to cnLedger .

Featured image from Shutterstock.