The People’s Bank of China has decided to wait two to three years before regulating bitcoin following their meeting with major bitcoin exchanges within the country.
After a widely-reported meeting — of which the contents remained mostly a mystery — the People’s Bank of China met with BTCC (Bitcoin China), OkCoin, and Huobi. The main takeaway from this meeting was that the PBOC urged the three bitcoin exchanges to undergo and maintain self-examination in terms of monitoring bitcoin price changes.
Money laundering was the only topic mentioned publicly before the meeting took place. Bloomberg reports that regulators were concerned about money laundering and how widely bitcoin is being used as a safeguard against the depreciating Yuan.
The potential of bitcoin regulation in two to three years by the PBOC could have a devastating impact on the values of bitcoin, as a large portion of bitcoin is mined in China. Bitcoin has miraculously evaded government regulation by any country around the globe thus far.
According to Bloomberg, BTTC has also halted the withdrawal of bitcoin for 72 hours by way of a necessary review period, while OkCoin and Huobi suspended them both completely for 72 hours.
In reaction to the news of regulatory talks and withdrawal suspensions, bitcoin price fell 7%.
Smaller bitcoin trading outlets in China have all imposed trading fees as a result of the meeting, according to CoinDesk. BTC Trade, BTC100, CHBTC, Dahonghuo, Yuanbao and BitBays all took part in this implementation. Yuanbao and BitBays both cited regulatory concerns when justifying the trading fees, while BTC Trade stated that it did so “in order to curb speculation [and] to prevent price speculation.”
Not only does government announcement of likely future regulation hurt business in general, but closed-door meetings and public discussion of the possibility of regulations taking place has been particularly devastating for the price of bitcoin.
Photo Credit: ChinaFotoPress/Getty Images
Nicholas Amato
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