BEIJING--China's central bank is moving to regulate its domestic bitcoin industry, circulating new guidelines that, if enacted, would require exchanges to identify clients and adhere to banking regulations. <\/p>\n
Recent scrutiny by the central bank has already led exchanges to impose trading fees and suspend withdrawals of bitcoin from their platforms. Chinese investors have fled the market. <\/p>\n
A draft of the guidelines says Chinese bitcoin exchanges would be subject to current banking and anti-money-laundering laws, and required to collect information to identify their clients, according to people familiar with the matter. They say the rules, if implemented, would require exchanges to install systems for collecting and reporting suspicious trading activity to authorities. The People's Bank of China would be in charge of handling violations by the exchanges. <\/p>\n
The people said officials could still revise the guidelines, which were given to exchanges in recent days. <\/p>\n
The PBOC didn't immediately respond to a request for comment. <\/p>\n
The move to regulate bitcoin exchanges brings assurance that authorities will tolerate some level of trading after months of uncertainty. The central bank opened up investigations in January at the country's three largest bitcoin exchanges, Huobi, OkCoin and BTCC, and delivered a terse warning last month that platforms risk being shut down if they skirt rules on money laundering and foreign exchange. <\/p>\n
In the past 30 days, yuan-denominated bitcoin trades accounted for 17% of global volume, down from 97% in the past six months, according to data tracker Bitcoinity. <\/p>\n
But regulation also means Chinese exchanges would face a tighter operating environment. <\/p>\n
Since the scrutiny started, Huobi, OkCoin and BTCC have said they are working with authorities. An OkCoin spokeswoman said in an email on Friday that the firm continues to work with the PBOC and welcomes a balanced, risk-based regulatory framework. <\/p>\n
Analysts say a major reason the central bank started probing the exchanges this year was concern that Chinese investors were using bitcoin to get money out of the country, albeit in small amounts. China has been struggling with a depreciating yuan and waning confidence in its economy. The bitcoin network flies under the radar of authorities, who have allowed holders to move bitcoin from an exchange based on the Chinese mainland to a foreign location. <\/p>\n
When Chinese investors first snapped up bitcoin and drove up prices in 2013, the central bank banned banks and third-party payment platforms from engaging in the industry and defined bitcoin as a virtual good, not a financial asset. They stopped short of issuing direct regulations on bitcoin exchanges, which flourished in the following years. <\/p>\n
Authorities continue to regard bitcoin as a virtual good, according to people familiar with the matter. The latest guidelines apply to any \"trading platform for virtual internet goods,\" these people say. <\/p>\n
Write to Chao Deng at Chao.Deng@wsj.com<\/a> <\/p>\n <\/p>\n View original post here: BEIJING--China's central bank is moving to regulate its domestic bitcoin industry, circulating new guidelines that, if enacted, would require exchanges to identify clients and adhere to banking regulations. Continue reading
\nChina's new bitcoin rules call for identity check - MarketWatch<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"