Earlier in mid-January Bloomberg, referring to people aware of the case, reported that Chinese government planned to ban internal access to Chinese and offshore cyber money platforms that allow centralized trading. The view of country’s officials has not changed much since that time.
On February 4, The People’s Bank of China’s media outlet Financial News released a report, according to which the state’s government ostensibly is preparing a range of control gauges as a part of the subsequent clampdown on virtual money.
A Storm About to Break
Chinese Central Bank started tightening the crypto ‘screws’ around a year ago. In September 2017, China forbade initial coin offerings, as well as bitcoin trading, which could put the country’s economy at risk. Because of this, lots of domestic crypto exchanges had to shut down.
And this time, the authorities are reportedly going to target all sites (no matter whether it’s an internal or an external one), connected to the industry of virtual assets and ICOs. Merely speaking, the authorities may ban all of them.
According to the government-supported site ThePaper.cn, in the report, published by the Chinese Central Bank’s (PBoC) newspaper, it was said:
“To prevent and mitigate financial risks, authorities will take regulatory measures against ICOs and virtual currency exchanges inside and outside the country, including the banning of relevant businesses, banning and disposing of domestic and foreign exchange virtual currency websites.”
Also, it was reported that after the first stage of the clampdown, the size of yuan-denominated crypto trading has fallen from more than 90% of worldwide trading scope too less than 1%. It was also stated that such results helped to diminish the jeopardies for the economy. Remarkably, the Chinese government released the first ‘Notice’ of an absolute taboo on ICOs at the beginning of September 2017. By the end of the month, the sanctions led to the cessation of trading on crypto platforms.
Moreover, the Sunday’s report hinted that the realization if the regulatory ban is done in accordance with the initial ‘Notice,’ and it was found out that the taboo prompted local traders and investors to dodge the restrictions thanks to foreign exchanges, including Japan and Hong Kong as primary whither. In particular, despite the ban, there still have been proceeded trans-border operations, as well as dodged restrictions on cyber money trading and ICOs practices.
By the way, recently influential bitcoin exchange BTCC, previously based in China, has been acquired by the Hong-Kong blockchain investment fund. Its CEO, Bobby Lee explained the decision about the relocation by the exposure to a broader variety of sources in much freer region, needed for the platform’s survival.
In the report, it was also admitted that the government is aware of jeopardies which still exist, among which there are scams, illicit emission, and even pyramid selling. Perhaps, that is the reason why authorities want to target international crypto websites.
Finally, after January’s Bloomberg report, Reuters cited a senior Chinese PBoC Vice Governor Pan Gongsheng, who said that government should have prohibited centralized trading of cyber coins, as well as banned people and companies that offer this kind of services.