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Report: Chinese Authorities Considering Bitcoin Regulation; Price Falls

Last Updated March 4, 2021 4:53 PM
Samburaj Das
Last Updated March 4, 2021 4:53 PM

Bitcoin price struck a low of $845 (at the time of publishing) from a high of $918.4 on the Bitstamp Price Index for the day as China’s financial regulators are reportedly seeking opinions on how to regulate the trading of bitcoin.

According to a report by China Daily, the country’s financial market regulators have inquired on how exchanges work during times of major price moves during last week’s much-publicized meetings with executives of major bitcoin exchanges.

Whilst seeking opinions on how to regulate trading of the cryptocurrency, a proposed move “may include setting up a depository platform” the prominent daily newspaper revealed, citing a source.

The daily points to a handful of authorities’ concerns surrounding bitcoin trading. These include focusing on the transparency of bitcoin trading, the possibility of the cryptocurrency used as a channel for capital outflows and safeguarding traders’ rights.

In an emailed statement to CCN.com, Chinese exchange BTCC – one of three bitcoin trading platforms spoken to by the People’s Bank of China last Friday – has explicitly stated that it adheres to “strict AML/KYC policies”. Furthermore, the premium price of bitcoin and the loss of value in converting yuan to bitcoin to foreign currency makes it unlikely that Chinese investors are using the cryptocurrency to evade China’s capital cap, according to recent comments by BTCC CEO Bobby Lee.

Conflicting Reports

Contrary to China Daily’s claims of authorities looking into any activity of capital outflow through bitcoin, Lee has also revealed that BTCC had received no pressure by the PBOC to plug the exit of Chinese capital via the cryptocurrency. “Nothing verbal or written to us,” stated Lee, following the meetings.

Further, the bitcoin executive also sees regulation to occur in a further 2-3 years in China, as opposed to any impending moves by authorities to do so.

As things stand, bitcoin price remains volatile, currently trading at $868 on the Bitstamp Price Index (BPI), bouncing after a low of $845 today, a steep fall after a registering a high of $918.4 for the day. The impact of the PBOC’s warnings has been telling and the lack of clarity on what was discussed during the meetings is perhaps only adding to bitcoin price’s own uncertainty.

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