Bitcoin fell even lower while China is likely to tighten regulation on the digital currency.
According to Bloomberg, Bitcoin declined even further by 1.4 percent arriving at $888 in Hong Kong. This comes after it had already fallen by 10 percent last Friday, January 6.
Its recent movement was reportedly labeled as unusual by the People’s Bank of China seeing as it is a virtual commodity and does not have the legal status of a currency. It caused the bank to reiterate their ban that states financial institutions are prohibited to handle bitcoin transactions.
If bitcoin trading will disturb the financial order in China, the director of Finance and Securities Research Institution at Wuhan University of Science and Technology said that there is a possibility that it will be made illegal.
In addition, the Managing Director of Kapronasia said that bitcoin is very likely going to be regulated. Policy makers are going to require reports and monitoring, but exactly what the regulations will be is unknown.
The digital currency has been rallying since 2015, reports Bloomberg, wherein to combat the weakening yuan, Chinese buyers had been purchasing bitcoin onshore and selling it offshore in exchange for another currency. This allows them to avoid the tight restrictions on fund outflows.
Bitcoin trading platform, BTCChina, has already been told by the People's Bank of China to conduct self-checks in response to the "unusual" activity. The bitcoin firm has been working closely with the central bank to ensure that no Chinese laws are being broken.
Another bitcoin trading firm called Huobi also plans to work with other bitcoin companies to establish industry standards, says its Chief Operating Officer. Even the Beijing and Shanghai branches of the People’s Bank of China had met with representatives of bitcoin firms in order to discuss the operations.
One firm that was present, OkCoin, stated that these regulations that are balanced and risk-based would benefit the industry. For more news, follow Jobs & Hire.