Starting tomorrow, China’s largest bitcoin exchanges will begin charging trading fees at a flat 0.2 percent for every transaction.
The changes stemming from the People’s Bank of China’s involvement in bitcoin trading activity between China’s biggest bitcoin exchanges continue.
Within days of BTCC, Huobi and OKCoin formally announcing the halt of margin or leveraged trading for Chinese users, the three exchanges will now begin charging traders a flat fee of 0.2% per transaction.
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An announcement from BTCChina this Sunday read that charging fees for bitcoin and litecoin trading will commence from midday, Tuesday.
The reason, as stated by the exchange reads:
We are implementing fee-based trading to curb market manipulation and extreme volatility.
1/ BTCChina, our CNY exchange, will start charging fees for bitcoin and litecoin trading from 12:00 PM (noon) UTC+8, Tuesday, January 24th.
— BTCC (@YourBTCC) January 22, 2017
Huobi made its announcement on its website, reading along the same lines. So too, did OKCoin, on its website. All three announcements by the three bitcoin exchanges – whose trading and business practices are being scrutinized by the central bank – were released almost simultaneously on Sunday. Their phrasing proved to be nearly identical, as well.
BTCC CEO Bobby Lee hinted toward introducing fees for traders last week following the announcement to halt margin and futures trading.
According to comments reported by the Wall Street Journal today, Lee stated:
The exchanges got together and said, Lets do this.
A fourth exchange, Beijing-based Yunbi, also announced its move to begin charging trading fees, in order “to “prevent speculation and sharp fluctuations of Bitcoin prices”, on its website. The fee will only apply toward bitcoin trades, while other “fee rates for other blockchain assets remain the same.”
The new trading fees were not explicitly demanded by the PBOC, according to one Reuters source. Instead, the decision by the bitcoin exchanges to introduce the fee was in line with the PBOC’s desire to see less volatility in the bitcoin trading market, according to the publication.
The latest developments with changes in the China’s trading market has not seen any major impact on the value of the cryptocurrency, at the time of publishing. Bitcoin price fell to a low of $892,27 on Sunday following the trading fee announcements following a high of $937.74 on the day. A quick bounce back ensued, however, with price recovering toward the $920 mark. At the time of publishing, bitcoin is trading to the dollar at $921.22 on the Bitstamp Price Index (BPI).
Although trading volumes are almost certain to be impacted from tomorrow with the introduction of the fees, it remains to be seen if the new charges impact bitcoin’s valuation. There is the plausible scenario that Chinese traders move to other alternative cryptocurrencies or ‘blockchain assets’ that do not incur any trading fees. Furthermore, there’s no telling if the no-trading-fee practice makes a comeback in the future in China or if international competing exchanges see this as an opportunity to refresh their own trading fees at competing rates.
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All time references are in Coordinated Universal Time (UTC).
Image from Shutterstock. Charts from BitcoinWisdom.