China Plans to Block Access to Domestic and Offshore Cryptocurrency Platforms

| Updated
by Darya Rudz · 3 min read
China Plans to Block Access to Domestic and Offshore Cryptocurrency Platforms
Photo: Osrin / Flickr

China is planning to completely ban activity of centralized cryptocurrency exchanges, 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. In such a way, all websites and mobile apps that provide cryptocurrency exchange-like services are now targeted together with individuals and businesses offering associated services.

China is one of the biggest Bitcoin mining hubs in the world. Last year the country shocked 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 access to both: 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.

He said:

“The financial work conference clearly called for limiting ‘innovations’ that deviate from the need of the real economy and escape regulation.”

Also adding:

“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 at least at the moment, which means that individuals will still be able to trade with each other passing by a centralized system.

Regulations introduced for keeping activity of crypto exchanges under control are not a big wonder today. 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.”

News from South Korea heavily affected the cryptocurrency market, which suffered instability and sharp fluctuations of prices. Interestingly, that those 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 its main competitors. According to CoinMarketCap, its current price is $12,386,30 per coin, while Ethereum is worth $1155,54 and Ripple makes up $1,47.

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