‘Chinese Policy Makers are Starting to Study and Rediscover the Bitcoin Industry’ - Huobi

Following the exciting news out of China that points to a possible change in attitude by the government towards Bitcoin, Cointelegraph caught up with one of China’s biggest bitcoin exchanges, Huobi, to get a better understanding of Bitcoin’s prospects in the country.

The Beijing-based exchange recently saw record BTC trading volumes among all exchanges. It should be noted, however, that trading CNY-BTC on Huobi is free, but fees are applied for USD-BTC trades making it similar to OkCoin, which is frequently associated with commission-free trading.

“The Chinese government should study how digital currency is regulated in the US and follow the steps to establish our own regulation system.”

- Huobi

[Note: the following answers have been provided by several Huobi team members including CEO Leon Li.]

Cointelegraph: How would you interpret the significance of the People's Daily article posted on the CAC website for our Western readers? Do you agree that we are in a “post-Bitcoin era”?

Huobi: Recent bitcoin regulatory activities in the US have set an example for other countries including China. We agree that this “post-Bitcoin era” will inevitably lead to mainstream development in China.

Shifting from volatility to stability requires regulation and rationality. The Chinese government should study how digital currency is regulated in the US and follow the steps to establish our own regulation system, so that Huobi and other bitcoin exchange platforms can compete positively under a standard legal framework and facilitate bitcoin development in the right direction.

From a financial perspective, we think bitcoin can be seen as an investment similar to gold or a global standardized digital asset. As blockchain technology is being widely applied, bitcoin will be accepted by more companies and individuals. However, there’s still a long way before it is used as a currency.

Huobi CEO Leon Li

CT: What has been the reason we have been seeing record trading volumes on Huobi recently?

Huobi: Huobi daily trading volume of bitcoin reached 770,000 BTC on October 22, which has made a new record among bitcoin exchanges. We think there are mainly three factors causing this spike in trading volume.

First, the global finance market is experiencing a bounce back after the downturn this summer. Bitcoin market is one step ahead of other markets, which may lead to the rise of trading volume from a macro perspective.

The first global blockchain summit was held in Shanghai recently, gathering hundreds of experts from official departments (PBC finance research institute, PBC credit reference center) banks, brokerages and other financial sectors. Huobi CEO Leon Li also attended the summit and the event drew much public attention to bitcoin and technology to strengthen investors’ faith as well.

Meanwhile, Huobi became the first bitcoin exchange to launch 5X margin trade tool this September, which may have also stimulated users to trade more.

CT: Could you update us on your Caimao platform that links the Shanghai stock exchange to bitcoin? How has the downward market trend affected its operations?

Huobi: Caimao was created and aimed at becoming a one-stop investment service platform covering a variety of global financial products. We recently launched a new project allowing users to invest in stamps, coins and phone cards, which we think is an exclusive market in China.

Moreover, we are also preparing trades of precious metals and planning to launch HK stocks and US stocks at the end of this year. Although China’s stock market is bearish now, with the impetus of Internet technology, the stamps market has already become the second largest investment market after A share market in China. With the Bitcoin industry being gradually regulated, the link between other investments and bitcoin will be on the right track in the future.

CT: In our last interview you noted that Chinese stocks were “too hot to ignore” for many bitcoiners who were jumping onto the stock market. Now that the trend has reversed, are you seeing these traders return to bitcoin?

Huobi: All financial products including stocks are related to capital flow and the economic cycle in the long run. Bitcoin performed well in the recent downturn on the global finance market. On one hand, this reflects the market’s positive attitude towards bitcoin; on the other hand it has concern with the rapid development of Bitcoin and blockchain technology.

“[T]he number of new users on Huobi increased by about 127% compared with September. We believe more traders will return to bitcoin.”

In the last two months, Huobi witnessed bitcoin price spike