Chinese financial regulators have threatened to impose bans on peer-to-peer (P2P), and over-the-counter (OTC) operations national wide as CCN reports. Despite such plans, regional bitcoin trading has registered a continuous upsurge in activity.
It remains unclear how the Chinese authorities will deal with those P2P and OTC bitcoin trading platforms. The Chinese government could blacklist or declare illegal the domains or use its firewalls to ban domains, like Google, YouTube and Facebook do, to regulate P2P trading.
Volumes are still skyrocketing
Trading activity seems to be rapidly escalating even as restriction and regulations intensify. LocalBitcoins trading volumes upsurge to a high of $74 million according to Coin Dance, P2P and OTC bitcoin trading data provider. Analysts suspect Richford and other regional OTC service providers are engaging in more bitcoin trades than their Chinese OTC counterparts.
Effects of the ban
Chinese government’s stringent decision on bitcoin trading market has scared some traders to surrounding markets like South Korea, Hong Kong, and Japan. Richford is profiting from this action through attracting traders who have struggles with Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.
The Chinese government and the People’s Bank of China regulations on bitcoin trading last year intended to bar traders from moving to unregulated P2P and OTC markets.
A sizeable Chinese bitcoin providers hope the Chinese government in future license bitcoin trading platforms to regulate and stabilize the market. Otherwise, a ban will spur numerous underground bitcoin markets that negatively impact Chinese bitcoin industry.