China Planning a War Against Cryptocurrency Trades

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The media are reporting that China is now drafting a new resolution which will see Bitcoin exchanges banned in the country.

A bitcoin beside Chinese yuan currency. Like bitcoin, the prices have bounced off this level and it trades above $300 as of this writing but the uncertainty and the risks continue to dominate the market in the short term.

Chinese authorities are ordering domestic bitcoin exchanges to shut down, delivering a heavy blow to once-thriving trading hubs that helped popularize the virtual currency pushing it to recent record highs.

The Wall Street Journal is a massively influential mainstream media publication in the global finance sector. In response to the news, the Bitcoin prices have dipped to a low of $4,108, according to CoinDesk. Owning Bitcoin and other virtual currencies would still be allowed, but users won't be able to exchange it into fiat currency online.

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Exchanges including Okcoin and Huobi have already said that they received no notices from the Chinese government and that business is as usual.

The news was initially taken as a disallowance of trading between virtual currencies and legal tender in China.... however, it was further revealed that the intent is to target unauthorized trading at any of the virtual currencies. According to bitcoin market data provider Coin Dance, demand toward bitcoin in over-the-counter and peer-to-peer bitcoin markets such as LocalBitcoins has actually increased over the past two weeks. But, as bitcoin mining and blockchain research firm BitFury Vice Chairman George Kikvadze explained, the impact of the Chinese government's announcement was minimal and the bitcoin market recovered within hours.

Bobby Lee, CEO of China's oldest Bitcoin exchange BTCC, posted a poll on Twitter asking users if the reports are true or "fake news", suggesting he doesn't believe them. Momentum is rebuilding in China, despite the ongoing bitcoin exchange ban talks and the PBoC's supposed introduction of plans to suspend bitcoin exchanges indefinitely.

Featured image from Shutterstock.