Chinese exchanges deny bypassing capital control but regulation inevitable
As per a report by Caixin, a famous economic and political media, several bitcoin exchanges denies the possibility of using bitcoin to bypass the tightening capital control in China. The report attributes the rocketing price of Bitcoin to global demand and the loss of faith to traditional currencies.
“The Bitcoin Bubble Index is 2, way below the level back in late 2013.”
Bitcoin Bubble Index by Jiang Zhuo’er source: 8btc forum
Wu Gang, CEO of Haobtc, attributes the recent rise to the increasing global demand for bitcoin, which is driven by
OTC trade instead of the online exchange.
He also says that recently there is no increase of foreign registrants and transactions and it is impossible to use Bitcoin to exchange foreign reserve.
Bobby Lee, CEO of BTCChina, blames the fiat system:
The currency inflation and cash-ban have shaken people’s faith in fiats. It has become a trend to convert fiats into digital assets.
He also mentions the relatively stable supply of Bitcoin makes it a more stable storage of value.
Star Xu, CEO of OKCoin, warns the potential bubble and refutes the link between FX and Bitcoin.
“Bitcoin price has no connection with foreign reserve exchange, that’s for sure.”
“If people keep on buying Bitcoin in China and dump it abroad, the price variance between Chinese and foreign Bitcoin exchange will keep on growing. However, the fact is that the price variance is quite stable.”
In accordance with regulatory requirements, the domestic Bitcoin trading platform must conduct anti-money laundering review, which also applies to all foreign bitcoin exchanges.
These exchanges are trying not to draw fire against themselves. However, the efforts may be futile as the market is heating up in China. As pointed out in a report by Shenwanhongyuan Securities on January 3rd:
“At present, the domestic Bitcoin transactions are still in a gray area, although the operation poses some difficulty and risk to general public, but theoretically it is possible to realize currency exchange bypassing the capital quota and censorship through domestic purchase and sale abroad.”
Although Bitcoin is treated as commodity in China at the moment, its features like quick transfer, large amount has dwarfed relevant regulations.
The strengthening of regulation on Bitcoin transaction is inevitable.