The Bitcoin market in China is currently faced with uncertainties. Since the recent price drop, the digital currency platforms operating in the country have come under the scrutiny of the People’s Bank of China (PBOC).
During the recent inspection of Chinese cryptocurrency exchanges, PBOC reportedly found few “hidden risks” in their existing practices. As the central bank continues to contemplate further action, Huobi, OKCoin and BTCC have made few changes to their existing offering.
In its latest statement, BTCC mentioned that the company is currently cooperating with the agencies in their investigation. Meanwhile, all the operations on the platform are going on as usual.
According to reports, the inspection was led by a group of regulators from the Shanghai branch of PBOC, along with Shanghai Financial Affairs Office and other government agencies. Following the investigation, BTCC along with Huobi and OKCoin stopped offering margin loans to its users. With PBOC’s report yet to be released, the media outlets are speculating about the future of cryptocurrency trading in China. BTCC has requested its customers not to rely upon the media reports entirely and to take rational, informed decisions while trading bitcoin.
Some believe that the recent inspection of Chinese Bitcoin platforms to be part of the groundwork being conducted by PBOC before drafting Bitcoin regulations. At the same time, reports of huge losses among traders after the sudden fall in Bitcoin prices seem to have played a role in the recent developments as well.
Many traders had complained that they couldn’t log into their accounts on few bitcoin exchanges during the price drop. Their inability has since then been attributed to a sudden surge in traffic, leading to overloaded IT infrastructure of these exchanges.
In the coming days, the three major cryptocurrency exchanges in China may introduce trading fees to discourage excessive trades. Such a move is expected to significantly reduce the number of automated trades which currently stand at as high as 80 percent of all trades conducted on the platform.
All these factors will also contribute towards the stability of the cryptocurrency, making it more suitable for regular exchange of value.
Ref: Reuters | Image: NewsBTC