Recently, representatives from the People’s Bank of China as well as the financial regulators from Shanghai and Beijing visited the offices of most of the cryptocurrencies in China. According to the official statements of the officials, they were to take action on any money laundering activity which might be taking place with the help of cryptocurrencies.
However, according to the Chief Operating Officer of Huobi, Robin Zhu, they visited the offices of the cryptocurrency exchanges to check the scale of the operations. According to the Chief Operating Officer, they were there to understand the working of cryptocurrencies, including Bitcoin.
The People’s Bank of China also enquired in great detail about the number of users as well as the transaction volumes in most of the cryptocurrencies. Even though the exchange has been consistently submitting detailed information to the authorities, the People’s Bank of China wanted to get more information about the industry. This is the reason why they visited the offices of various cryptocurrency exchanges.
According to him, the information which was collected by the authorities will help them create a regulatory framework. This is actually not a worrying prospect for most of the cryptocurrency exchanges. This will bring in more transparency in the cryptocurrency exchange business. It will also bring in more volumes as legal status will attract more investors to cryptocurrency. On the other hand, the strict ban on ICOs in the recent past is worrying cryptocurrency investors.
While some of the traders believe that this is just a start of the clampdown on crypto exchanges, others believe that it is just regulatory research which the authorities are conducting. According to the CEO of the cryptocurrency exchange, the volumes have fallen by almost 90% since last November. This is followed by the crackdown of China on cryptocurrency traders as well as exchanges.
The biggest cryptocurrency exchanges of China, OkCoin, and Huobi are planning on international expansion. This is being done to avoid over-dependence on the Chinese market. According to them, they had never expected such a harsh clampdown on cryptocurrencies in China.
Launching their own cryptocurrency
One of the cryptocurrency exchanges, Huobi has even launched its own token. The Exchange believes that the launch of the token will create loyalty among its customers. This is the strategy which the exchange will be adopting in order to shore up the volumes in the coming few months.
Growth of Binance
The lack of growth in local cryptocurrency exchanges is prompting exchanges like Binance to gain more momentum in China.
In the coming few months, it remains to be seen whether the regulatory framework has adopted or clamp down on cryptocurrency exchanges put into force.