China’s central bank is reportedly expected to release new rules for bitcoin exchanges later this month.
According to a source quoted by Caixin, the People’s Bank of China’s (PBoC) investigations into the exchange ecosystem are complete, with regulations set to be put forward sometime in June.
The news, from 10th May, came just before China’s bitcoin exchange sector began processing digital currency withdrawals following a months-long freeze. That pause began following meetings between regulators in China and domestic exchange operators earlier this year.
Investigators reportedly drew issue with the fact that the platforms were providing financing and margin trading services to clients, according to Caixin, while further faulting the exchanges for their anti-money laundering systems. The withdrawal freezes from earlier this year were initiated as those markets moved to update those systems.
According to statements made previously by Xuedong Zhou, director of PBoC’s business management department, regulators are likely to ban the exchanges from providing leveraged trading, financing, and margin trading services. He also said that exchanges should not try to pump up the trading volume through waiving transaction fees.
Chinese regulators are also discussing possible regulations on initial coin offerings, or ICOs, according to a report review written by Yao Qian, director of PBoC’s digital currencies research department.
He wrote in May:
“Although the government is being tough on bitcoin, but in some sense, we should give a break to companies that has a top 10 market capitalization ICO market. We should give a chance to people to invest on these companies -- at least you could possibly be investing on some disruptive technology. It’s better than buying some stocks that are actually trash.
In the same review, he suggested that Chinese regulators to speed up the legislation for ICO regulations and to use a sandbox model.
Yao also discussed several plans including establishing ICO platforms like crowdfunding platforms, which will be responsible for educating the investors, reviewing ICO initiatives, disclosure of information, and anti-money laundering. Another model he discussed is adapting a venture capital management style and let professionals make the investment decisions.
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Update: This article has been amended to accurately reflect publishing dates.