The Chinese authorities volition probable resume cryptocurrency trading inward the upcoming months amongst necessary Know Your Customer (KYC) in addition to Anti-Money Laundering (AML) systems inward place.
Earlier this week, Xinhua, the state-owned word publication of China, revealed that the Chinese authorities is concerned amongst criminal activities surrounding cryptocurrencies such every bit bitcoin. It emphasized that cryptocurrencies receive got instruct the “top choice” for clandestine economies in addition to revealed that the authorities volition receive got appropriate measures to regulate the marketplace position past times implementing a licensing plan in addition to strict AML systems.
Why the Ban on Chinese Exchanges is Not Beneficial for the Government
Last month, the Chinese government, the People’s Bank of China (PBoC), in addition to local fiscal regulators imposed a nationwide ban on cryptocurrency exchanges. Consequently, the cost of bitcoin cruel to $3,000 in addition to the cryptocurrency marketplace position endured a major correction.
Since then, the global cryptocurrency central marketplace position has restructured every bit the bulk of trading volumes from China moved to neighboring markets such every bit Nippon in addition to South Korea. More to that, the Japanese authorities officially authorized eleven cryptocurrency exchanges inward the same month, providing an efficient in addition to well-regulated ecosystem for Chinese traders. As a result, the bitcoin cost has recovered in addition to has remained higher upward the $4,000 margin.
But, the Chinese government’s ban on cryptocurrency exchanges besides led to the increasing trading volumes of over-the-counter (OTC) markets in addition to peer-to-peer trading platforms such every bit LocalBitcoins. For the Chinese government, such tendency is a major concern inward price of KYC in addition to AML policies because traders are directly able to central cryptocurrencies in addition to merchandise the Chinese yuan without the command in addition to the interest of Chinese authorities.
Previously, when regulated Chinese cryptocurrency trading platforms such every bit BTCC, OKCoin, in addition to Huobi were around, the overwhelming bulk of cryptocurrency trades were overseen past times the PBoC through KYC in addition to AML systems adopted past times businesses inside the Chinese cryptocurrency central market. Today, it is non possible for the Chinese authorities to regulate cryptocurrency trades because they are beingness processed in addition to settled inward markets that are exterior the make of the local authorities.
Licensing Program Similar to That of Nippon Likely
Xinhua noted that the authorities is considering the possibility of licensing in addition to record-keeping cryptocurrency trades, every bit local sources including CnLedger have shared. CnLedger, a trusted source of cryptocurrency word inward China, stated:
“Xinhua News, official press means of CN: Virtual currencies receive got instruct the overstep choices of clandestine economies. We shall adopt ‘0-tolerance policies’ towards crimes hidden underneath in addition to receive got measures such every bit record-keeping, licensing, AML processes, real-name, limiting large transactions.”
In lodge for the authorities to adopt a zero-tolerance policy on cryptocurrency-based criminal activities, it needs to receive got infrastructures inward house that tin permit the authorities to oversee payments in addition to break the identities of cryptocurrency users. Without KYC in addition to AML systems, every bit seen inward trading platforms similar LocalBitcoins in addition to other OTC markets, it is nearly impossible to execute a zero-tolerance policy on cryptocurrency crimes.
As Xinhua suggested, it is definitely possible that the cryptocurrency central ban inward China is solely temporary until the Chinese authorities releases a stricter record-keeping, licensing, in addition to AML policies for trading platforms.
Also, every bit experts in addition to executives at overseas central markets such every bit Hong Kong revealed, the ban on cryptocurrency exchanges receive got non stopped Chinese investors from buying in addition to investing inward cryptocurrencies.
“The ban did non halt them [Chinese investors] from buying cryptocurrencies. In the final few weeks, nosotros receive got seen a lot of mainland customers opening upward accounts at TideBit. They notwithstanding desire to play the game. I run across a growing require inward that they volition come upward to Hong Kong or Singapore to purchase cryptocurrency,” said Terence Tsang, primary operating officeholder at TideiSun, the nurture fellowship of TideBit.
Featured picture from Shutterstock.
