Bitcoin exchanges soon banned in China: the end of crazy climbing?

Business: Local authorities are preparing to ban the domestic trade of all virtual currencies. Following this announcement, trading volumes have already fallen in China.

If the course of bitcoin skates since a few days, its dazzling value has marked the spirits. Including that of the Chinese authorities. (Source: abcbourse.com)

China rushed to Bitcoin four years ago. Why ? Because Bitcoin serves as a safe haven against a Renminbi (also called Yuan) at the course kept voluntarily low by local authorities. A woolen stocking that now attracts more than gold. The course of Bitcoin now reaches more than 4,000 euros, after crossing a course that was thought to be historic in January, or 1,000 euros.

But here is the country's central bank has just drafted a plan that prohibits Chinese platforms to provide virtual currency trading services, ensures the WSJ. Last week the Chinese authorities had already banned the issuance of new cryptocurrencies in the form of ICO (Initial Coin Offerings)

Play against the Yuan
The Chinese authorities are looking into the Chinese people's appetite for bitcoin since the beginning of the year. Initially, they considered putting in place rules against money laundering on virtual currency exchanges. But governance issues for Beijing increased as prices of virtual currencies, such as Bitcoin, rose.

Analysts and investors explain that one of the reasons why the price of Bitcoin has suddenly increased is that the Chinese have started using this asset to play on a decline in the value of the yuan. Most importantly, virtual currencies can in theory allow holders to bypass the traditional banking system to transfer money outside Chinese borders.

Following this announcement, trading volumes have already fallen in China. Analysts also say that the activity becomes more discreet, actors using "private addresses", which serve as safes. They also mention that Chinese regulators should probably tolerate the non-commercial exchange of virtual currencies over time.

Two of China's largest Bitcoin marketplaces, Huobi and BTCC, said over the weekend that regulators have not asked them to close their operations. "We are still awaiting official notification from regulators," said Bobby Lee, CEO of BTCC.

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