Things that are likely to happen when major Chinese Bitcoin exchanges shut down
An official termination of the Bitcoin exchange market of China is likely to happen due to the closure of Huobi and OKCoin -the leading Bitcoin exchange and trading platforms in the Cryptocurrency market of China. Both these trading platforms were given leeway by the government of China to function until the end of October.
An Unclear Span of Suspension
It is unclear if the nationwide suspension of the exchange and the Chinese Cryptocurrency trading platforms is permanent or temporary. The Wall Street Journal and other trusted resources have several reports suggesting that the Government of China is looking for the chances of banning the activities of Cryptocurrency trading and the use of Bitcoin totally.
An argument was made by a researcher for the Central Bank of China- Huang Zhen which was published in the Bank of China (PBoC) that the existing banking infrastructure and central banks will face a threat because of Cryptocurrencies. He also mentioned that his own country’s digital currency to be issued by China.
Zhen's said nationalizing the currency issuance was challenged by the sovereign state’s right to issue Cryptocurrencies and virtual currencies. He also said China has a precise understanding of digital currency and is engaging in the related work. In order to explore the digitalization of sovereign currency, the central bank has set up an institute for digital money research and a research group for the same. To maintain China’s leadership in the progress of the global digital finance, after the supervision, they are planning to launch their own sovereign digital currency by the Chinese central bank as soon as possible.
Digital Fiat Currency (DFC)
Most of the people in the Government of China and perhaps Zhen did not understand the merits and advantages of Cryptocurrencies like Bitcoin stems from the nature of decentralization. The central entities can manipulate Bitcoin and several other cryptocurrencies if it is not decentralized. Due to such manipulations, there will be a decrease in the demand for Bitcoin as a safe asset and a digital currency.
Jon Creasy and other long-time investors remain positive about restoring of the Bitcoin exchange market of China. Creasy specified in his own blog that the surge of practical and effective regulation for the Bitcoin businesses, investors and users will happen if there is a re-election of the President of China- Xi Jinping- free markets avid advocate.
Casey expects the reign of Mr President Xi Jinping to continue, as he has been one of the largest advocates of the free market for quite some time. He also said that he should appeal to the communist party.