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“To trade or not to trade?” or How Chinese Exchanges Overcome the Bitcoin Ban?

Nov 23, 2017

It is a wide-known fact that China had banned Bitcoin exchanges. The reason for this ban is the government’s statement that frauds and money laundering took place on the exchanges.

Before these bans, China had a trustworthy role as one of the biggest cryptocurrency trading markets. At the same time, this country is ahead with the mining business and became, actually, one of the centers for crypto-enthusiasts. What is happening now and what are the perspectives?

After the Bitcoin exchanges ban, the most valuable market players shut down and pushed China far back on the world’s Bitcoin community. Meanwhile, Japan implemented regulations that are much more favorable for traders and overtook the market with 44% part of the market share. Some analysts state that the Chinese ban will remain legal until government creates a special licensing program that will cover the work of cryptocurrency exchange platforms.

What about now? News resources state that the biggest exchanges on the market are already looking for solutions. The ban came into power on October 31st and now they need to move business or change their ways of work. A curious fact is that OTC trading offerings are still not banned as these trades have fiat currency support. This creates a way to work for crypto exchanges even now. Exchanges have not tested these ways of P2P offering yet and we will surely analyze how this works in practice. The scheme is tested by OKEx, part of the worldwide OKCoin trading company, and Huobi.pro, one of the Chinese giants.

Chinese news sources assume that the government authorities might ban P2P exchanges too when they understand it’s a kind of breach. There is a point of view, that after the last Chinese elections, XI Jinping, who was re-elected as the President and General Secretary of the Communist party, may implement changes in cryptocurrency regulations. He is a recognized advocate for innovations on financial market and it is possible that under his supervision government will re-enable Bitcoin exchanges and other banned activities with cryptocurrency.

Offshorelicense Ltd continuously keeps track on the news of Bitcoin exchanges all over the world, not only in China. If your business requires working with cryptocurrency, we are ready to analyze the market and offer the best jurisdiction to make your entrepreneurship successful.

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