Not long ago, China decided to crack down on digital currencies by banning both initial coin offerings and exchanges within the mainland. While there has been speculation that the country will soon reintroduce trading, no concrete evidence is available at this time.
Big exchanges moving abroad
Despite the recent exchange ban, some of the country’s largest digital currency exchange operators are not willing to step down. With this in mind, companies like OKCoin and Binance, alongside numerous other large exchanges and wallet service providers, are planning to move abroad into other Asian countries with friendlier regulation.
In fact, recent reports indicate that many of these companies have begun the process of applying for licenses to operate in Japan, Hong Kong, South Korea and Singapore, all of which are places where bitcoin trading and exchanges aren’t strictly regulated, and where the firms can continue their activity safely. For instance, in September alone, Japanese regulators approved licenses for a total of 11 exchanges.
To be sure, many exchanges are seeking to retain Chinese customers who remain interested in digital currency trading. That’s why companies such as OKEX are preparing to launch P2P and OTC services within mainland China. While OKEX is based in Hong Kong, launching these services would allow the firm to continue serving customers on the mainland.
At this point in time, most of China’s trading activity is processed through OTC markets which have been left unregulated. There are, however, several disadvantages to OTC transactions, such as higher rates and the abundance of scammers.
What are your thoughts on the rumors that the Chinese government may reintroduce digital currency trading? Let us know in the comment section.
