Over the past week, inaccurate news regarding the supposed ban on Chinese bitcoin exchanges in mainstream media outlets in China and the US including Caixin, the WSJ and Bloomberg have shaken the bitcoin markets.
Almost immediately after the release of Caixin’s report, bitcoin’s price endured a minor correction, falling to around US$4,100. Despite showing signs of recovery, followup reports from the WSJ, Bloomberg and other Western news publications caused the bitcoin price to decrease to US$3,790.
While some analysts have speculated that the baseless criticism from JPMorgan Chase CEO Jamie Dimon led to the minor downturn, bitcoin experts including Blockstream CEO Adam Back stated that attributing the decline to Dimon’s statement is far-fetched, mainly because Dimon has continually criticized bitcoin since 2014. Back explained:“I doubt Dimon had any impact. Reaction is just china. I’ve been buying the ‘china bans bitcoin’ dip every time, each time move is smaller.” What Will Happen to Chinese Exchanges?
Today’s statement from China’s National Internet Finance Association (NIFA) translated by Bitcoin.com read that Chinese cryptocurrency exchanges have no legal authority to operate at the moment, and that exchanges have received many warnings in the past.
However, NIFA, the People’s Bank of China (PBoC) and local financial regulators will not ban bitcoin exchanges. In the near future, regulators intend to release a licensing program to provide Chinese exchanges with a properly regulated ecosystem in which to operate. Hence, in the upcoming weeks, Chinese exchanges will likely face stricter regulations and policies, but will not be banned or suspended.
From a regulatory standpoint, the Chinese bitcoin exchange ban rumors could positively affect Chinese exchanges moving forward, as the government will prepare a set of regulatory frameworks granting local trading platforms legal status and authority...