Yuan share in Bitcoin trading hit by China’s crackdown on cryptocurrency
Bitcoin trading in the Chinese currency renminbi has slid substantially to less than 1 percent of the world’s total trades, the state-run news agency Xinhua reported on Saturday. The report, citing the country’s central bank, said that Bitcoin trading in renminbi had accounted for over 90 percent of global trades, prior to the government’s crackdown on cryptocurrency trading.
The steep decline comes after the government banned all ICOs and direct trading between the renminbi and digital currencies in September last year.
The People’s Bank of China said it had shut down 88 cryptocurrency exchanges and 85 ICO trading platforms since it imposed the ban last year, the Xinhua report added.
Sharp fall seen as no surprise
“It is within expectations that the yuan’s share in global Bitcoin transactions would drop after China announced the ban,” Guo Dazhi, research director at Zhongguancun Internet Finance told news outlet GlobalTimes.
Guo added that China’s ban on trading of cryptocurrencies may have prevented Chinese investors from heavy losses due to market turmoil in the past few months.
The Chinese government has also taken a tough stance on crypto exchanges and OTC outlets, forcing many to move out of China to set up shop in places with more favorable laws.
Aftermath of ban
Binance, the world’s largest crypto exchange in terms of trading volume, moved to Japan in October following the ban. OKCoin, rebranded as OKEx and currently the second largest virtual exchange on the basis of trading volume, relocated to Malta while Huobi was forced to move its operations to Singapore.
China represents a huge market for virtual currencies despite the ban. Over 50 percent of Bitcoin is controlled by China, according to Ripple (XRP)’s CEO Brad Garlinghouse.
State-run media China Central Television (CCTV) had reported in May that ICOs token sales were “rampant” despite the ban on cryptocurrencies, stating that the ban could not curb local investors from buying tokens.
CCTV added that air coins, or token-based projects unsupported by businesses with legal registration, were prevalent in the country, with an estimated 30 times rise in the coin number following the ban.
Image via Shutterstock
Join our telegram group