China is set to try and wipe out cryptocurrency trading by blocking all websites related to initial coin offerings (ICOs) and cryptocurrency trading, including all foreign websites. The Chinese publication Financial News, which has known affiliation with the People’s Bank of China (PBOC) published an article on Sunday night that outlines the government plans to eradicate cryptocurrency trading in the country.
The Chinese government had already attempted to stop cryptocurrency trading by banning ICOs and shutting down domestic exchanges. But those measures didn’t stop traders accessing foreign trading sites via the internet. The latest move will use China's formidable firewall to stop access to these sites. “ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions,” the article explained. It went on to say, "To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs.”
Bitcoin set to suffer further loss
The increased regulation comes at a bad time for cryptocurrencies and bitcoin particularly which is experiencing a huge loss in value. Worry over future regulation has shaken the cryptocurrency world in the last month causing a massive plunge in the overall value of the market. Bitcoin is currently trading below $8000 USD down from close to $20,000 in December.
If the reported ban does come into play, it could have a massive effect on the cryptocurrency market as it will effectively stop any traders in China from easily access their funds. The news could prompt another mass sell-off of cryptocurrency assets. Connor Campbell, a financial analyst at the financial betting firm Spreadex, describes the latest bitcoin uncertainty: “The cryptocurrency has had a horror show week already, dragged lower by regulation changes in South Korea and news that Facebook is banning adverts for the product on its site," he said. "Already feeling delicate, then, bitcoin was dealt another major blow this Friday, plunging 10.5% to 8,000 following reports that the US Commodity Futures Trading Commission is investigating the cryptocurrencies ludicrous end of 2017 rise for signs of market manipulation."
Europe wades into regulation debate
Cryptocurrency traders might feel like they are under attack from all sides as China, South Korea, and India all threaten tougher regulation on the market. But now Europe is also starting to discuss the possibility of its own regulation. French finance minister Bruno Le Maire was reported to have ordered a former central bank chief to draft potential new rules for the market. Le Maire is concerned about the ‘risks of speculation and possible financial manipulation’ linked to Bitcoin and other such currencies. But despite many countries trying to regulate the market, the very nature of cryptocurrency makes it very difficult to localize.
Joachim Wuermeling, a member of the board of Germany’s Bundesbank, thinks a national approach isn’t the way to effective regulation. "Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation because the regulatory power of nation-states is obviously limited," Wuermeling said at a conference in Germany earlier this year. While he may have a point, it doesn’t seem to be stopping individual countries taking the market into their own hands and starting regulation measures that are proving to have a big impact on the market.