Huobi Bitcoin exchange will begin offering over-the-counter (OTC) services for Chinese traders soon, as announced by CEO Lin Li. This news came as traditional Chinese crypto-to-crypto exchanges breathed their last breath.
Heavy regulation has forced Chinese exchanges to rethink their business models. As of 1 November, trading cryptocurrencies on open Chinese exchanges is henceforth prohibited, and in response, they are considering over-the-counter transactions. This would enable traders to purchase digital currency (i.e.Bitcoin) using fiat currency such as the Chinese yuan. Timeline for introducing this feature is yet unannounced.
China’s New Platforms
OKEx will also be launching a modified P2P trading platform to supplement Huobi’s. Unlike Huobi, however, the yuan will be the only approved fiat currency used for capital exchange. Both exchanges have seen strong demand, locking in well over 10,000 applicants since they opened on November 1st.
Whereas the old exchange models functioned similarly to Bitfinex or Bittrex, the new model will more closely resemble that of Coinbase. Higher fees and more restrictions will likely accompany the regulated version, as seen with Coinbase.
Huobi is also considering taking its platform international, says CEO Lin Li. They have already dabbled in some international markets, including the following:
- Huobi.pro – headquartered in Singapore with a Hong Kong subsidiary
- Huobi.co.kr – headquartered in Seoul, South Korea and based on Korean won
- Huozhuo China (huobi.cn) – headquartered in Beijing
- Huobi.com Global Dollar Station (huobi.com) – will provide digital US dollar trading services across the globe (awaiting approval)
China’s Stance on Cryptocurrency
While China acknowledges the benefits that digital currencies have brought, its leaders are quibbling over its alleged ‘dark side’.
“The efficiency and convenience of digital assets is a “double-edged sword” that will allow people access to efficient financial services, but also can be used for illegal activities such as money laundering fraud.”
By all means, shun the most disruptive technology we’ve seen in decades because it ‘can be used for money laundering’. “Bitcoin fraud” seems to be the rallying cry for central institutions around the world. They never hesitate to point out the abysmally small percentage of black market trade conducted in Bitcoin and similar currencies designed for privacy, and conveniently forget that the majority of these ‘dark operations’ are financed entirely by fiat currency. Out with logic and in with regulation.
Market Shrugs off China
Bitcoin seems to be unaffected by China these days. At press time it hovers just under its all-time-high at $7,150, poised to strike higher. Following the Bitcoin Gold fork, Segwit2x has driven the bull rally higher, as Bitcoin2x futures are fetching nearly $1200, as tracked by CryptoCompare.com. Legacy Bitcoin futures, on the other hand, point to a selloff ahead. Traders are expecting about $6,000 BTC post-fork.
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