Blockchain Cutting Edge Company Founder On How To Stay Legal in China
How restrictive regulations in China affect Ethereum Killers
Cointelegraph spoke to Eric Gu, the founder of ViewFin, the team behind Metaverse Blockchain in China, about the challenges caused by the China regulators’ shocking actions, the role of geopolitics, further plans of officials and what the Chinese Blockchain-based businesses are planning to do in response. We also spoke about the Ethereum killers and what programming language can give you an edge in China.
On Thursday, second largest Bitcoin trading platform in China, BTCC announced that registration for new accounts for the trading platforms was stopped from that day onwards.
That day, it became known that all its Bitcoin exchange businesses will stop Sept. 30th after considering the announcement made by the Chinese regulators, namely the People’s Bank of China (PBOC), the Cyberspace Administration of China (CAC), the Ministry of Industry and Information Technology (MIIT), the State Administration for Industry and Commerce (SAIC), China Securities Regulatory Commission (CSRC) and China Insurance Regulatory Commission (CIRC).
In response to the regulation. OKCoin has announced on Sept. 15 that it will temporarily stop the registration of new users and deposit service in RMB, and to gradually reduce the exchange of cryptocurrency with RMB until it comes to a stop by the end of October. Huobi has made a similar announcement.
Fractions of coin trading
According to Gu, it is possible that in the future, China might disallow the trading of fractions of crypto coins.
“If you want to buy a Bitcoin, you have to buy one Bitcoin, you cannot buy 0.1 Bitcoin because that is security. Security in China is regulated by CSRC. I think in the future if the exchange platforms are not closed, they might not be able to trade fractions of a coin anymore.”
Consequently, the market base will shrink as not many people can afford to buy one Bitcoin. Gu further gave an example ‘In Shanghai, average income is about RMB 6,000 but one Bitcoin’s worth is RMB 30,000. Thus, not many people can afford that, it also takes away the liquidity.’
“These people are a reliable source when Bitcoin was banned in 2013, they were the first to release the rumor and they were right. Maybe this is not a rumor, this can be a fact, you need to take them seriously. The consequences can be severe.”
Bitcoin is immune to geopolitics
When asked about how the new regulations might affect the Bitcoin price, Gu explained that, in his opinion, Bitcoin price should have dropped but the recent tension in the Korean peninsula has boosted Bitcoin price. These two events even out the value of cryptocurrency hence it has not dropped significantly despite the Chinese regulations.