China Plans to Block Domestic Access to Chinese and Offshore Cryptocurrency Platforms
Originally published on: CoinSpeaker
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January 16, 2018
Chine is planning to completely ban activity of centralized cryptocurrency exchanges. It is targeting websites, mobile apps, people and businesses that provide exchange-like services.
A senior official from the People’s Bank of China (PBOC) — the country’s central bank — suggested imposing a complete ban on buying and trading cryptocurrencies over centralized exchanges. All websites and mobile apps that provide cryptocurrency exchange-like services are targeted. Chinese authorities will also aim at individuals and businesses that offer associated services.
China is one of the biggest bitcoin mining hubs in the world. Last year the country astonished the cryptocurrency world for the first time, banning Initial Coin Offerings (ICOs) — a means for start-ups to raise funds by selling off new cryptocurrencies — and closing down domestic cryptocurrency exchanges. Later it decided to put restrictions on the use of electricity consumed by the Bitcoin miners. Now the government is planning to block domestic access to homegrown and offshore platforms that enable centralized trading.
Pan Gongsheng, PBOC Vice Governor, said that his suggestions were based on the need to “prevent the build up of risks in that market.” Pan also reportedly called for imposing a ban on such services as online wallets, as they allow people to store virtual currencies.
“The financial work conference clearly called for limiting ‘innovations’ that deviate from the need of the real economy and escape regulation,” Pan said. He also added: “Pseudo-financial innovations that have no relationship with the real economy should not be supported.”
However, small peer-to-peer payment systems are not being targeted. This means individuals will still be able to trade with each other — just not through a centralized system.
Regulations introduced for keeping activity of crypto exchanges under control are not a big wonder. Last week, South Korea was trying to impose a ban on cryptocurrency exchanges. This attempt was not successful, but it was still very much under consideration on Tuesday, according to South Korean Finance Minister Kim Dong-yeon.
“The government stance is that it needs to regulate cryptocurrency investment as it is a largely speculative investment. The shutdown of virtual currency exchanges is still one of the options that the government has,” Kim said. “We are also tinkering with the option of levying taxes.”
Following the events in South Korea, the cryptocurrency market suffered instability and hesitation of prices. Last week, major digital currencies fell. But the market was floating and currencies started recovering soon. Cryptocurrencies, which are heavily concentrated in the South Korean crypto exchange market in terms of daily trading volume and user activity, have recovered faster than others.
As for Bitcoin, it continues to fall in price, as well as other top cryptocurrencies. According to CoinMarketCap, its current price is $12,386,30 per coin, while Ethereum is worth $1155,54 and Ripple makes up $1,47.