According to CnLedger, a trusted source of cryptocurrency news in China, the Chinese government is interesting in licensing exchanges and record-keeping of cryptocurrency trading.
… and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions (3/3)https://t.co/QS8bJWXdAZ
— cnLedger (@cnLedger) October 4, 2017
In order to regulate cryptocurrency market Know Your Customer (KYC) and strict Anti-Money Laundering (AML) systems should be implemented. These steps can likely resume cryptocurrency trading but there is no assurance that results will be seen in nearest future.
Last month, the Chinese government, the People’s Bank of China (PBoC), banned ICOs named it illegal process. After this announcement, digital tokens couldn’t be used as currency on the market and only two China-based exchanges could continue its operation. However, on September 15, these exchanges (Huobi and OKCoin) had to stop trading services for local customers according to the official instruction from the country’s authorities.
Measures of Chinese government led to sharp drop of bitcoin price. It fell to $3,000 since its high price of $5,013.91 on September 2. Nevertheless, Chinese government didn’t achieve primary goals and great benefits weren’t received. Later, many Investors, business leaders, and analysts powered bitcoin in their statements.
“Bitcoin’s rally is continuing off the back of a more certain regulatory environment across the world, most notably in Japan. This has encouraged more institutional funds to enter the market and we are finally seeing the effect of this additional liquidity,” founder and CEO of Gatecoin Aurélien Menant said.
Moreover, Hu Bing, a researcher at the Chinese Institute of Finance and Banking, supposed in September that the government’s ban on ICOs was temporary. He announced that ICOs would be proceeded after necessary regulatory frameworks and licensing programs were established.
As results, today bitcoin has traded at $4,840. It is highest level since September 8.
Besides, ban on cryptocurrency exchanges didn’t stop Chinese investors from cryptocurrency trading. Traders from China moved to neighboring cryptocurrency markets such as Japan, South Korea and Hong Kong.
“The ban did not stop them from buying cryptocurrencies… In the last few weeks, we have seen a lot of mainland customers opening up accounts at TideBit. They still want to play the game. I see a growing need in that they will come to Hong Kong or Singapore to buy cryptocurrency,” the CEO of Hong Kong-based exchange TideBit Terence Tsang said.
In the beginning of October, Japan recognized eleven companies as registered cryptocurrency exchange operators granted Virtual Currency Exchange license to them.
Probably, Japan experience in сcryptocurrency legislation will help to establish regulatory frameworks and policies for Chinese cryptocurrency market.