OKCoin, one of the two Chinese Bitcoin exchanges, is demonstrating progress in sorting out user fund withdrawals. On Feb. 9, it was requested by the People’s Bank of China (PBoC) to halt Bitcoin and Litecoin withdrawals.
On March 1, OKCoin told their users that the exchange is approving the transfer of user funds stored on the global OKCoin trading platform to their Chinese site because the company’s .CN platform is nearly ready for approval by the PBoC and relaunch.
Earlier in January, the PBoC asked OKCoin and Huobi, two of the largest Bitcoin exchanges in China, to suspend trading until their Know Your Customer (KYC) and Anti-Money Laundering (AML) systems are overhauled. The abrupt termination of OKCoin Bitcoin withdrawals stemmed from the PBoC’s initial warning sent out to Huobi and OKCoin on Jan. 18.
At the time, OKCoin operators announced a time frame of one month for the completion of their KYC and AML system update, which meant that users would not be able to withdraw their funds in Bitcoin or Litecoin for 31 days.
However, OKCoin emphasized that the one month period could be either shortened or delayed depending on the development of their new industry-compliant AML and KYC systems. Since an AML and KYC update essentially led to the renovation of the entire platform, OKCoin and Huobi weren’t capable of providing a fixed date of withdrawal approval.
OKCoin seeing progress
On March 1, OKCoin representatives told their users on WeChat, a popular Chinese messaging platform with over 700 mln users, that the exchange is approving the transfer of Bitcoin and Litecoin from their .com to .cn site.
Basically, OKCoin is approving users transferring their user funds stored on the global OKCoin trading platform to their Chinese site because the company’s .CN platform is nearly ready for approval by the PBoC and relaunch.
An OKCoin representative stated:
“Transferring Bitcoin from our domestic site to international site is not supported. But, transferring Bitcoin from international to domestic site is allowed.”
At the time of writing, it is difficult to conclude whether this means that OKCoin users will soon be able to withdraw their funds in Bitcoin and Litecoin. It is likely that these updates are being released within the Chinese community as the one-month deadline is approaching. According to their original roadmap, users should be able to withdraw funds on both Huobi and OKCoin in less than eight days.
Optimistic announcements from OKCoin and Huobi have coincided with the Chinese government’s decision to initiate quantitative easing or printing cash to inject into their economy. Financial analysts including Reuters have reported that the PBoC is eying a 12 percent increase in money supply in 2017, which means that the government intends to increase its money supply by trillions of yuan throughout this year.
"It's not necessary to maintain last year's high money supply growth. A money supply rise of 11 percent should be enough for supporting growth, but we probably need to have some extra space, considering risks in the process of deleveraging,” a government insider told Reuters.
The demand for Bitcoin will most likely rise if the Chinese yuan continues to devalue as a result of inflation. If the Chinese government opts to match its 12 percent cash injection plan as reported by Reuters and local financial companies, the value of yuan is expected to decrease and the demand for safe haven assets or decentralized currencies like gold and Bitcoin will most likely increase.
China also recently lowered its projected economic growth, decreasing its forecasted growth rate from 7 to 6.5 percent.