This weekly news summary from China, Taiwan and Hong Kong attempts to plan the most important news in the industry, including influential projects, changes in the regulatory environment, and enterprise blockchain integration.
This week, China resumed work after a week-long National Day celebration, which is always full of flag waving, military parades, and passionate nationalism. This year’s version was aggravated by the recent return of Huawei executive Meng Wanzhou after three years of detention in Canada and the increased tension in the Taiwan Strait. Government regulators have been eliminating the mainland’s cryptocurrency industry for most of the past six months. This topic has given Shanghainese a lot of topics to discuss in this weekly column.
Limited market access
On Wednesday, Binance announced that it will take a step towards compliance closure P2P in the RMB market. According to the announcement on Binance’s official website, the change time is December 31, 2021. At the same time, users in mainland China will be inquired and the account will be switched to the withdrawal mode only. At the same time, users will only be able to use withdrawing, closing positions and other basic functions. Binance will notify the corresponding user via email 7 days before the account switch.
The remaining retail holders did not accept the news well. They believe that if stricter measures (such as offshore accounts) are not taken, there will be fewer and fewer reliable exports. Binance has always been one of the most popular P2P markets, mainly because of the exchange’s reputation, liquidity, and Binance’s geographic distance from Beijing. Binance has always insisted that its website is blocked in China and does not have an exchange business in China, so it is not subject to mainland regulatory policies.
It is undeniable that the lack of P2P fiat currency options will make Chinese citizens living in mainland China less comfortable investing in cryptocurrencies. With the upcoming launch of the eCNY central bank digital currency, stricter statutory regulations may make it difficult for a large number of fiat currencies to enter and exit the crypto market. On the other hand, many people are less worried because they know that as long as there is an opportunity to provide on-demand services, an over-the-counter market will emerge. There is always a way for technology to develop where it is most needed.
Reading between the lines
This move looks quite serious on paper, but there are still some gray areas that need to be checked. Since entering this year, millions of Chinese users have registered on top exchanges, and many of them are active traders and large holders. This is no secret. Some of them may be intimidated by recent government policies and trading rules and reduce their exposure to asset classes. Others are actively being injected into DeFi, which can be seen from the rise in on-chain transaction volume from China.
Other users will only choose to wait, especially considering the rapidly changing nature of national policies. A common belief is that exchanges that choose to self-regulate may not actually implement this policy very strictly at the beginning. This is due to the lack of clear support for how to deal with overseas Chinese users. Users can completely circumvent the rules by providing proof of international residence or other forms of identification. The silver lining here is that any selling pressure caused by the uncertainty or fear of Chinese investors will be suppressed by the longer compliance transition period.
For companies operating entirely outside of China, it is difficult for regulators to enforce policies, especially if the exchange claims to self-regulate by banning intellectual property rights and not accepting new Chinese registrations. This is the strategy that exchanges such as OKEx and Gate.io seem to follow, because these two large platforms with Chinese roots have announced that they are fully compliant and do not accept Chinese users, so they will not make any major changes.
Gate announced its policy, but did not emphasize the removal of existing mainland Chinese users. https://t.co/q3yYLMX0Wp
-Wu Blockchain (@WuBlockchain) October 13, 2021
A famous social media influencer on Weibo wrote:
“The content of this announcement is a bit strange. I think the exchange will conduct a self-check and try to find the remaining Chinese users on the platform, but after the self-check, if the exchange announces that there are no Chinese users, the exchange will only keep them There.”
This post was later deleted on Weibo. Currently, all topics related to Binance and other exchanges are censored by social media applications such as WeChat.
Perhaps the most surprising takeaway from all this is the market’s indifference to news. Previous announcements of this magnitude have had a very significant impact on market prices. On Wednesday, after Binance’s announcement, the BTC price fell briefly and then rebounded to above $58,000 the next day.
This shows that the market does not pay much attention to the impact of news from China, but pays attention to claims such as the US is about to obtain ETF approval and Vladimir Putin’s accident. Admission About cryptocurrency. With more growth and decentralization, market risks become more diversified, and investors can rest assured.
On October 11, the financial magazine Caijing was launched story Discuss the recent crackdown on cryptocurrencies. The main point is that the central bank’s recent announcement is only a guideline, and the actual judicial interpretation and enforcement needs to come from the prosecution agency of the court system. The article implies that the judiciary is conducting research on the legality of mining and cryptocurrency businesses, which may cause trouble for those who violate the rules. Those who have successfully circumvented the rules so far may not be out of the water.