Crypto Trading in China
In this guide, we go over what is going on with crypto trading in China at the moment. Due to a crackdown by the government, factors such as legal status, market development, mining
As a conclusion, we provide a brief analysis of crypto trading future prospects in China. The aim of this guide is to provide analysis that Chinese traders can use while making their investments. If you come from different country, you might want to check out our guide about crypto trading in Africa or Europe, for example.
Is Crypto Trading Legal in China?
There is a good deal of incompatibility between the Chinese governmental system and blockchain technology. The Communistic Republic exerts great control and power over its borders and does not like markets that are not part of its jurisdiction. Blockchain and crypto coins are exactly that, a decentralized online money system, controlled solely by the market.
Thus, it is no wonder why government officials speak negatively about cryptos and their actions prove it. In 2017, the government banned ICOs and even forced domestic exchanges to stop their operations. Now, in 2018, it banned even foreign-based trade platforms as a measure against digital coins.
Thus, trading bitcoin and other altcoins are practically not allowed within Chinese borders. Several officials did announce that in near future, with new regulations, the said ban might lift. However, at this moment, if you happen to live in China, trading is out of your reach.
In 2017, the Chinese government started out its crackdown on cryptocurrencies. The first step was to ban all ICOs from operating within its borders. Then, ICOs and projects coming out, as a result, form them, were out of legality as well. This move, as noticed by CoinDesk, put huge pressure on the global crypto industry, dropping bitcoin’s value down by 6%.
The main goal of the ban was to crack down exchanges and trading centers alike. At first, ICOswere hit but soon after, through unofficial communication, platform closed its offices in China, one by one. At the end of 2017, the government finally banned all domestically-based platforms and ICOs form operating.
Still, Chinese traders have not banned themselves from engaging in trade, thus working with foreign platforms. Hong Kong companies took the initiative and brought even larger market share unto them as a result. Thus, in February 2018, the Chinese government decided to go step further and ban even foreign-based business if they are connected with crypto trade.
There are several important consequences form these developments that we need to mention that can affect crypto trading in China. The largest one is definitely the impact global crypto world felt. China held a good portion of traders and banning them from the usage of trade services was a blow to the coins’ values. With a good portion of traders unable to reach trading marketplaces, platforms outside ofChina suffered as well.
The possibility of Ban Reversal
Lately, there has been talking about the ban reversal, due to the lack of enforcement power. Cryptocurrencies have shown quite a resilience towards controlling environments, even in the wake of bans. This signifies the fact that governmental bodies were preparing a set of regulations as to control the market.
The resilience lies in the fact that blockchain technology allows traders to engage in transactions without providing their personal details. There are numerous platforms out there that would not ask for ID verification or make IP requirements. Several spokesmen of Ministry ofIndustry and Information Technology (MIIT) did mention that ban lift exists as an option.
Thus, we are confident that China will lift restrictions on the trade. The question still remains on when the said action will take place. The said development can have a huge impact on the crypto world since the largest mining and trading community lived in China. Without limitations, even markets in other countries would experience vast growth.
ICOs are what drive the market currently since many new trading platforms came out as a result of fundraisers. The People’s Bank ofChina announced plans on trying its hand while creating its own blockchain technology. Thus, it leaves no doubt that if sufficient regulation policy is possible, the market would continue its development.
Platforms that Still Operate
Even though platforms residing in China have limitations in their operations, they are still available for traders outside of China. There is also a belief that soon, the ban will lift and these companies would continue their activities within Chinese borders.
CEX.IO – Probably one of the largest
To know more about Binance and its token, BNB, read our guide about it.
Bitfinex – This Hong Kong-based business offers complex margin trading functions and tools for its clients, as seen below. The company is also the largest in terms of BTC to USD trade. Due to a hacking incident in 2017, the company strengthened its security and requires full verification of your account as a result.
It accepts bank transfers if you wish to work with fiats while over 30 cryptos are accepted for trade. To know more about the platform, check out our review about it.
Although banned, crypto trading in China still has a positive outlook for the future. The limitations have definitely hurt the industry inChina but also global market. However, trading platforms still operate outside of Chinese borders and are waiting for the ban lift.
Through investigation, we can say that there is a good chance for the Chinese government to move forward and lift restrictions in the future on crypto trading. Apart from China, we also made