Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

China Reportedly Set to Ban Cryptocurrency Trades on Domestic Exchanges

  by    0   0

The Chinese government appears set to take another step to crack down on bitcoin and other virtual currencies. Late last week, a Chinese publication announced the government plans to ban cryptocurrency trading on domestic exchanges. Reuters said a source with knowledge of the policy confirmed the plan is in the works.

This follows on the heels of last week’s People’s Bank of China announcement outlawing initial coin offerings (ICOs) and its order to halt of all related fundraising activity.

Officials say the ban on trading cryptocurrencies will only apply to exchanges and authorities don’t have plans to stop over-the-counter transactions. Bitcoin users can still trade cryptocurrencies without exchanges, but analysts told Bloomberg the process would likely be slower and come with increased credit risk.

Exchange operators in China still have not received official word on the ban. Arthur Hayes, chief executive of cryptocurrency trading platform BitMEX, told Reuters opinion was somewhat divided on the Caixin article.

“People are still waiting for official word from the regulator … I would assume that if China shuts down trading on continuous order books of the large exchanges, the price would drop below $4,000, or the price of the US dollar price of bitcoin would catch up to where it’s trading equivalently in China,”

Bitcoin slumped after Caixin magazine reported China’s plans. According to Bloomberg, China accounts for about 23% of bitcoin trades. Many of the biggest bitcoin miners also live in China.

Beijing-based FBG Capital invests in cryptocurrencies. Founding partner Zhou Shuoji said a Chinese crackdown would almost certainly impact the market.

Trading volume would definitely shrink. Old users will definitely still trade, but the entry threshold for new users is now very high. This will definitely slow the development of cryptocurrencies in China.”

But a China-based cryptocurrency investor, told Reuters he was doubtful that Chinese authorities could completely suppress cryptocurrency trading.

I think there is too much money to actually stop people from trading … The best they could do is ban exchanges but people will just use VPN or find another way.”

In what now looks eerily prophetic, before last week’s People’s Bank of China announcement outlawing ICO’s, emerging markets fund manager Mark Mobius warned that governments will begin clamping down on digital currencies because of their use in illicit financing, terrorism, and drug trafficking. He said that’s going to mean a rush back to gold.

Cryptocurrencies are beginning to get out of control and it’s going to attract the attention of governments around the world. You’re going to get a reversion back to gold because people are going to wonder, can I really trust these currencies?”

Increased government scrutiny could take some of the shine off cryptocurrencies. But as the Chinese investor said, their very nature makes them difficult to regulate and control. Governments can hinder trading by banning exchanges, but they can’t shut down the currencies themselves – not without turning off the internet. Nevertheless, the apparent bitcoin crackdown in China does raise a red flag.

Diversifying your cryptocurrency portfolio with precious metals can help mitigate some of the potential downside and put you in an overall stronger financial position.

Just consider the old adage – you don’t want to put all of your eggs in one basket.

SchiffGold can help you convert some of your Bitcoin into precious metals. Click HEREfor more information.

TaxFreeGold.Banner.1000x285

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Yield Curve Inverts Flashing Recession Warning; Stocks Plunge

The yield on the 10-year Treasury fell below the yield on the 2-year for the first time in 12 years, stoking recession fears and tanking stock markets. Yield curve inversions have preceded all nine recessions since 1955.  This was the first time the 10-year Treasury yield has dropped below the 2-year yield since June 2007 […]

READ MORE →

China Adds 10 More Tons of Gold to Its Hoard

the country of china shown on a globeChina bought gold for the eighth straight month in July, adding another 10 tons to its rapidly growing hoard. The recent purchases boosted the People’s Bank of China’s gold reserves to 62.26 million ounces – about 1, 945 tons.  China has added about 94 tons of gold to its stash over the past eight months.

READ MORE →

The Fed Has the US Economy on Life Support

The Federal Reserve has the US economy on monetary life support and Daily Reckoning managing editor Brian Maher says it will never again breathe on its own. As hedge fund manager Kyle Bass put it, the economy is trapped within the inescapable tractor beam of zero percent interest rates.

READ MORE →

2019 Federal Budget Deficit Already Above 2018 Number

The federal government continues to spend America into a black hole and has already topped last year’s budget deficit with two months left in the fiscal year. The US budget deficit in July came in at $120 billion thanks to a surge in spending, according to data released by the Treasury Department. Uncle Sam spent […]

READ MORE →

Is the Mainstream Turning Bullish on Gold?

In a podcast a couple of weeks ago, Peter Schiff said we now have all the elements of a gold bull market. Well, it looks like the mainstream might be starting to catch on. A headline at Bloomberg on Friday proclaimed “Hedge Funds Go All-In on Gold.” According to the Bloomberg report, hedge funds increased […]

READ MORE →

Comments are closed.

Call Now