China to ban commercial trade in Bitcoin – China’s latest business and technology news

Business & Technology

A summary of the top news in Chinese business and technology for September 11, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.

FILE PHOTO: An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City, July 21, 2015. REUTERS/Mike Segar/File Photo

Cryptocurrencies are hot these days. Flaming hot. Unfortunately, Chinese regulatory officials don’t much like fire.

On September 8, Caixin broke the news (in Chinese) that in addition to clamping down on initial coin offerings (ICOs) for cryptocurrencies — whether for Bitcoin, Ethereum, or dozens of smaller or experimental digital tokens — officials would freeze all commercial trading services for virtual currencies. While the news wasn’t confirmed by Caixin and other outlets until a few days later, it sent the price of Bitcoin tumbling down about 9 percent over the weekend, Quartz reports.

The Wall Street Journal quotes (paywall) an unnamed banking official in China who says that “too much disorder was naturally a basic reason” for the ban. The regulations are in draft form, but officials also told the Journal that the “decision to shutter [virtual currency exchanges] has been made.”

The new regulation will not completely outlaw trading in cryptocurrencies in China, nor will it necessarily put Chinese exchanges out of business. In fact, Quartz points out, two of the largest virtual currency exchanges, Huobi and OKCoin, both said they would essentially replace their public exchange businesses with smaller peer-to-peer trades once the regulations went through.