Main crypto exchange to stop serving users in mainland China at year end

Bitcoin, a type of cryptocurrency Illustration: VCG

Following China’s broader ban on crypto trading and mining, some major crypto exchanges with large user bases on the Chinese mainland, such as Huobi, have suspended new registrations of users on the mainland and plan to exit the market completely by the end of the year.

Binance has reportedly halted new registrations from mainland users. Huobi Global announced on Sunday that, in accordance with government regulatory policy, it will complete the opt-out of users whose personal identifications indicate them as residents of the mainland by the end of 2021, on the basis that the safety of users’ capital is guaranteed. .

Actions from two of the world’s largest bitcoin exchanges came after the People’s Bank of China (PBC), the country’s central bank, ruled on Friday that all crypto transactions were illegal in China.

Beijing banned bitcoin mining and trading in the early stages of the cryptocurrency crackdown. But the new ruling has expanded to ban all related activities – including order matching, token issuance and virtual currency conversion – which have hit the market the most.

It is also the first time that 10 government departments, including the National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology, and the Ministry of Public Security, have jointly ranked l ‘cryptocurrency mining as a sector to be phased out.

“This shows the PBC’s steadfast determination to ban all cryptocurrencies to protect the sovereign currency, the yuan, and to cut China’s financial system off the crypto market to address financial risks,” said an insider from the industry to the Global Times on condition of anonymity. on Sunday.

The Global Times earlier reported that 90% of China’s bitcoin mining capacity would be shut down as part of an intensified crackdown on cryptocurrency mining. But some small-scale mining projects rebounded in September. The new rule also aims to fill these gaps.

As Chinese investors flee the crypto market and sell digital assets, the exchange rate of USDT – the benchmark stable cryptocurrency pegged to the US dollar through which investors could convert fiat currency into digital currency and vice versa – against the yuan collapsed to about 6.2 yuan on Sunday, well below the rate of 6.5 yuan against the greenback, fueling widespread panic in the market.

As Chinese crypto investors scramble to pull out, there is unlikely to be a massive surge in Chinese investors in the future, as the doors to the speculative market have been closed completely, Shentu Qingchun , CEO of Shenzhen-based blockchain company BankLedger, told the Global Times on Sunday.

Chinese investors now represent around 10% of bitcoin buyers globally, according to industry insiders. The price of bitcoin fell 0.5% on Sunday, falling to $ 42,000.