Slowly slowly, like boiling frogs, exchanges are closing, one by one. This time is ViaBTC’s turn, one of the newest China based bitcoin and crypto exchange. They says:
“On September 4th, China’s central bank together with six other departments released a public statement on regulation policies and warning the risks of ICO projects. As a responsible cryptocurrency exchange platform, ViaBTC has made a serious decision to carry out the spirits of the policy – we will officially close the website for exchange business in Mainland China on September 30th. Before that we will complete processing of all withdrawal requests of CNY and cryptocurrency assets. ViaBTC mining pool and cloud mining services will not be affected.”
The September 4th notice most likely has nothing to do with their decision to close because that notice concerns ICOs and because almost all exchanges denied there were closing as recently as two days ago. Instead, since that notice was announced, the communist government has seemingly reached a conclusion to go a step further and close all exchanges.
Local authorities have been asked to enforce their secret decision. We call it secret because the authoritarian government has not yet made any public statement on the matter.
All exchanges are expected to close, with Huobi and OKCoin representatives rumored to be in a meeting with regulators today. Presumably to be verbally told to shut down.
Off the Counter Trading (OTC) and peer to peer trading is expected to be allowed, but whether that means one can set shop and sell btc directly to the public is unclear.
This marks an end of an era for China, both as far as this space is concerned and more symbolically as an open, global, nation that upholds the free market.
It comes just weeks before the biggest political event in China, a five-yearly congress of the ruling Communist Party. There are some signs of power struggles, so bitcoin might have been simply an easy picking.
The nation is at a cross road. To become a wealthy consumer economy, they need to undertake considerable free market reforms, and strengthen competition. The alternative is a cling to old communist ideas, and protectionism.
For now, they seem to have chosen the latter. Giving the country a zero sum advantage over other nations. In this particular case, the west pays their manufacturing miners $2 billion a year. It’s not a small sum and it’s part of a half a trillion deficit US has with China.
It may well be the case therefore that Trump might have something to say about this protectionist nation. It may also be the case that bitcoiners might decide to ban China.
Or we can all wait and see what comes after their communist congress meeting, when we might well hear bitcoin is not banned at all, but exchanges will just be regulated.