CNLedger, a trusted news source within the Chinese cryptocurrency industry, has revealed that OKEX will soon launch peer-to-peer (P2P) over-the-counter (OTC) bitcoin-to-fiat trading platform.
“More OkEx (and likely, Huobi-Pro) will soon launch P2P bitcoin tradings with various fiat currency support,” CNLedger reported. “We believe they’ll support CNY and some others like USD, JPY. They are registered outside China, and are operating independent of OKCoin. They’re not as convenient as exchanges and are less safe (many scammers). But it’s still much better than nothing.”
Aren’t OKEX and Huobi-Pro Now Based in Hong Kong?
OKEX is headquartered in Causeway Bay, Hong Kong, and so are companies including BTCC and Huobi-Pro, which previously operated bitcoin and cryptocurrency trading platforms in China. But, as CNLedger noted, these companies plan to launch P2P OTC markets in Hong Kong, which would allow investors to trade the Chinese yuan (CNY) for bitcoin and other cryptocurrencies.
Without approval from the Chinese government, it would be difficult to process CNY trades and serve Chinese clients, investors, and traders. Hence, if OKEX and Huobi-Pro launch cryptocurrency OTC markets in the upcoming weeks with CNY-to-bitcoin, it would likely be with permission from the Chinese government and the People’s Bank of China (PBoC).
As of current, the majority of trades within the China are processed through unregulated OTC markets such as LocalBitcoins. For Chinese authorities, it would be more beneficial to have regulated Hong Kong companies like OKEX to process trades rather than platforms with no network administrators and intermediaries.
Earlier this month, several state-owned news publications including Xinhua revealed that the Chinese government is concerned with bitcoin and cryptocurrencies being used by underground economies. Xinhua specifically noted that the Chinese government will soon impose “record-keeping, licensing, and Anti-Money Laundering (AML) process,” which is, in essence, are regulatory frameworks for the cryptocurrency market.
“Xinhua News, official press agency of CN: Virtual currencies have become the top choices of underground economies. ‘We shall adopt zero-tolerance policies towards crimes hidden underneath’ and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions,” reported CNLedger.
As Japan and South Korea have done in the past few months, it is likely that the Chinese government will introduce and enforce a more strict licensing program for cryptocurrency exchanges, and eventually, resume cryptocurrency trading.
Will Re-election of Chinese President Xi Jinping Fuel Cryptocurrency Trading Resumption
The re-election of Chinese President Xi Jinping, which is expected to fuel the resumption of cryptocurrency trading, is set to occur later this year. Analysts such as Jon Creasy, a bitcoin researcher, emphasized that the reelection of President Xi could very likely lead to the resumption of bitcoin and cryptocurrency exchanges.
“My prediction is this: as soon as President Xi Jinping is reelected — and he will be — conservative, free(er)-trade legislation will be put in place, and Bitcoin exchanges will be reinstated. In fact, I wouldn’t be surprised to see the Chinese government encouraging certain exchanges and cryptocurrencies, once this legislation hits. Historically speaking, President Xi Jinping has been one of the largest advocates of free markets China has seen in quite some time, and I expect this trend to continue.”
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Last modified: May 21, 2020 9:10 AM UTC