China Exchanges Continue To Close, But Messages Are Mixedbr>
Mixed messages continued today about China’s intentions regarding its cryptocurrency exchanges and initial coin offerings.
Late last week, the two largest Chinese cryptocurrency exchanges, Huobi and OKCoin, announced that they would close the yuan trading part of their business as of Oct. 30. They join BTC China and ViaBTC in announcing plans to unwind operations. Although reports indicate the firms have met with regulators and issued orders, no formal announcement from the government has been made, as was done with previous major financial bans on initial coin offerings (ICO) and exchange crackdowns. That’s led to uncertainty and rumors about what might happen next.
The current exchange closures came with caveats. While mainland operations are closed, the announcements by the exchanges left wiggle room that hinted that foreign operations would still be allowed. However, some reports indicate the Chinese regulators would ban all interaction with foreign exchanges, effectively walling off China from the cryptocurrency world.
Still other reports indicate that the government is considering allowing institutional trading, peer-to-peer trading without exchanges, or grandfathering in certain investors.
China is the third-largest market for bitcoin trading, with the yuan accounting for around 20 percent of trading this year. If a total ban on bitcoin and other cryptocurrency trading is enforced, China bitcoin mining pools will be left with no recourse on selling their accumulated holdings.
Also in question is China’s recent initial coin offering (ICO) ban. Although that ruling has been publicly announced, there still is some question as to whether there may be some modifications, rather than an outright ban. One Chinese official, speaking on a government-run television station, indicated that regulations may be coming that would permit controlled ICO offerings.
China has been on a campaign to stop capital outflow from the country for the last year. It has outright banned foreign investments by large holders, and has at times issued various controls on the cryptocurrency industries. Many analysts point to a cooling economy and China’s traditional need for control of its monetary system as the reasons behind the current crackdowns.