It is anything but surprising to learn China continues to scrutinize bitcoin users. Despite the PBoC doing everything possible to ensure bitcoin becomes more legitimate in the country, consumers are not too happy about the new regulations. A new guideline will force exchanges to identify all of their clients. To many people, this ruins the entire point of using bitcoin, even though an identity check is no cause for concern just yet.
China Ends Bitcoin Anonymity Once and for All
It was only a matter of time until new guidelines were introduced for Chinese bitcoin exchanges. After getting rid of leveraged margin trading and foreign exchanges to adhere to new AML guidelines, the PBoC has taken another step towards deanonymizing bitcoin users. Although bitcoin has never provided anonymity whatsoever, the central bank wants exchanges to verify the identity of every user on their platform.
To be more specific, this drafted guideline would force Chinese exchanges to adhere to the same rules as the banks. Collecting information about all users is not out of the ordinary, yet actively verifying the identity of traders who are not necessarily involved in fiat currency trading seems a bit unusual. It is evident the PBoC is concerned about everyone who uses bitcoin, mostly due to the risk of money laundering and evading taxes.
Introducing such a change would require Chinese exchanges to make major changes to their infrastructure yet again.. Collecting all of the required information before users start trading will require an overhaul of entire platforms.Tracking suspicious activities is not possible using the current infrastructure, although exchanges are working on rectifying this situation as we speak.
One thing to keep in mind is how these are mere guidelines, which can be revised at any given stage. That being said, the PBoC prioritizes the regulation of bitcoin exchanges for the foreseeable future, which should be seen as a positive trend. Ensuring bitcoin exchanges don’t skirt the rules will help legitimize cryptocurrency in China moving forward. It is expected that, if this new guideline will be implemented, Chinese exchanges will impose additional withdrawal delays for bitcoin and other cryptocurrencies.
JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.