It has been a while since we last heard from the PBoC. After the meetings with Chinese bitcoin exchange owners, things have become rather quiet. In a new statement, the PBoC director confirmed some exchanges violated AML laws. However, the girl is to adopt a forgiving attitude and not prohibit these exchanges from operating. An intriguing take on things, even though it raises some concerns.
It is evident China will continue to regulate bitcoin exchanges moving forward. The goal is set bottom lines as to what these platforms are legally allowed to do. Moreover, the PBoC wants to blacklist exchanges who violated the current AML regulatory requirements. It is unclear which exchanges violated these terms, though.
Contrary to what most people would expect, the PBoC will be lenient towards these companies. Government officials will adopt a forgiving attitude rather than prohibiting exchanges from providing their services. Additionally, an observation period will be established for bitcoin exchanges. Supervision of bitcoin exchanges in China will remain strict, which should not come as a surprise to anyone these days.
PBoC May Impose More Regulation For Chinese Exchanges
The PBoC governor also stated how regulators will continue to research the properties of bitcoin. Long-term regulatory mechanisms will be explored moving forward. Additionally, the PBoC will play close attention to the financial and commodity properties of bitcoin and other cryptocurrencies. In doing so, the government hopes to gain a better understanding of characteristics of bitcoin exchanges. After all, bitcoin is not considered to be money in China, although that situation may change soon.
1/ PBoC director: we shall adopt a forgiving attitude, not prohibit the exchanges for the time being & set an observation period. #bitcoin pic.twitter.com/3WXZXCGx0K
— cnLedger (@cnLedger) March 7, 2017
2/ CN regulators to research the properties of #bitcoin, explore managemnt policies for BTC exchanges at national level. Considers licensing pic.twitter.com/27e68ljS8X
— cnLedger (@cnLedger) March 7, 2017
It is possible licensing requirements will be introduced for specific “qualified” exchanges. This has not been confirmed as an official guideline yet, although it may be only a matter of time. It is unclear what this license would entail exactly, though. Chinese exchanges adhere to KYC and AML policies already. Introducing a specific license would be a setback, even though it provides more legitimacy to bitcoin as a whole.
Rest assured these regulatory measures will not be a temporary measure by any means. No one expected them to be either, as Chinese officials have made regulation bitcoin quite the priority. Interestingly enough, this has not affected the demand for bitcoin all that much. Trading volume is shifting from centralized exchanges to LocalBitcoins. Just last week, LocalBitcoins set a new weekly volume record for BTC/CNY trading. This new regulation can be a good thing for bitcoin in China as a whole. Some users will see it as a negative trend, yet it will end up having positive effects.
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