When it comes to the industry of Chinese cryptocurrency, the two biggest Bitcoin exchanges are Huobi and OKCoin. The Chinese government gives these two trading platforms a freedom to continue their business up to October 31 only. At the time of closure on the said date, it seems that the Chinese Bitcoin market will be considered as terminated.
Suspension Period is Not Specified
While the termination of Chinese cryptocurrency later this year is sure to happen, the duration is not specified. The Chinese government is not giving any indication if it is permanent or temporary. Aside from the Bitcoin trading activities, the Wall Street Journal and many other sources have revealed that the government may also restrict the usage of these digital currencies.
A researcher for PBoC (the People’s Bank of China), Huang Zhen, made a remark that Bitcoins pose as threats to the country’s central bank and other banking establishments. He added that it is better for China to create their own cryptocurrency
Here is the translated statement of Zhen:
“Cryptocurrencies and other virtual currencies attempt to challenge the sovereign state’s right to issue currency, requiring the nationalization of currency issuance. China has a clear understanding of digital forms of money, and is actively engaging in relevant work. The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money. After this round of virtual money markets supervision, we expect under the auspices of the Chinese central bank to launch our own sovereign digital currency as soon as possible to help maintain China’s leadership in the development of global digital finance.”
Is It a Digital Mandate?
As with many Chinese government officials, Zhen probably did not understand that because of decentralization, cryptocurrencies have become successful. Decentralization protects these digital currencies from being manipulated by central entities. It also prevents the value of Bitcoin from decreasing.
Jon Creasy, a long time investor, still has high hopes when it comes to the restoration of the Chinese Bitcoin trading industry. Many investors share the same sentiments as Creasy. Also a blogger, Creasy published a post on his site that the re-election of Chinese President Xi Jinping could result to the birth of better and reasonable rules and regulations for Chinese cryptocurrency. He added that these guidelines may benefits everyone concerned, including Bitcoin users, collectors, investors, and businesses.
This is Creasy’s blog post:
“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. But for now, Mr. Xi must appeal to the people who keep him in power: the Communist Party.”