Cryptocurrency trading may resume in China, a report suggests. As of September, the Communist Party of China banned the trading of Bitcoins – immediately impacting its price against the US dollar.
Are regulations going to relax in China?
The 19th National Congress of the Communist Party of China ended on the 24th October, meaning that typically some temporary regulations will also end. One of these is speculated to be the banning of Bitcoin exchanges in the country. During the Congress, the party leadership is questioned on its current economic policy in China and, in the past, this has led to the ending of damaging policies.
What’s the evidence?
A new cryptocurrency exchange website ZB.com has announced that it will be openly trading from 1st November and that accounts can be opened and deposits made. They claim that anyone in any country will be able to trade on their website. However, this does not mean that state regulations of the market will be retracted. There are many rumours, with some speculating that the website will be shut down soon, before trading begins. Additionally, some go as far to suggest that the platform is actually operated by the government.
The bigger picture
The Chinese government has tight regulation of its central bank and the expansion of cryptocurrencies possesses little threat to that control. The cryptocurrency market is a fraction of the size of the yuan and in the short term will not be used for everyday transactions. Only in the long term do virtual currencies have the potential to replace fiat currency, so its regulation is either a very proactive policy or to monopolise the market using ZB.com.