Trading volumes recorded by China’s three leading bitcoin exchanges fell following the central bank’s adoption of stricter scrutiny one month ago, a g
Trading volumes recorded by China’s three leading bitcoin exchanges fell following the central bank’s adoption of stricter scrutiny one month ago, a gesture that coincided with formal efforts aimed at restricting capital outflows.
China had enjoyed the status of the global largest venue for bitcoin exchange, with analytics websites bitcoinity even approximating that the Huobi, OkCoin, and BTCC exchanges accounted for over 90 percent of the entire bitcoin market on 11, January.
However, data gathered by Sosobtc, an analytic platform, revealed the number of bitcoins exchanged on the three leading exchanges dropped from 13.6 million, on January 6, to slightly over 120,000 on February 9.
China’s the People’s Bank last month introduced checks to the three exchanges to which they have reacted by stating that they’d enhance their systems by to avert money laundering and use of Bitcoin to trade the Yuan.
On Thursday, The same bank indicated it had additionally warned minor bitcoin exchanges that it would close them down, should they violate the regulations.
Last year, the Yuan lost 6.6 percent value against the Dollar, its worst performance in 12 years. On the contrary, the bitcoin value ascended to near-record levels.
That scenario, in addition to the comparative anonymity bitcoins offers, has provoked some market operators into believing the digital currency had become an appealing, if niche, alternative for tech-savvy Chinese allowing them to control the Yuan and even come up with rules curbing the amount of foreign exchange value people can acquire each year.
The three major exchanges have started charging trading fees, stopped permitting minimal lending and intensified scrutiny of client identities, making it significantly unattractive for automated, high-speed trades which previously accounted for a larger fraction of their business.
Failure to charge trading fees had given the exchanges an advantaged over abroad competitors, but the advantage is now nonexistent, traders expressed.
Business has almost come to an end on Beijing-based high-speed Bitcoin trading system BotVS, according to Chen Zhenguo, the Chief Executive.
“When you factor in the transactions fees, the profits you get from Bitcoin are extremely low…You can as well deposit your cash in Yu’eBao,” he added, alluding a money market fund operated by Alibaba Group affiliate.
Other traders expressed similar opinions.
Cai Wenhao, Sosobtc’s business manager, was optimistic trading volumes in China would normalize to levels seen on exchanges in other places, such as the Coinbase, based in the US, and the Bitifinex located in Hong Kong.