Prospective Opportunities & Risks for Bitcoin in China
For much of its short history, Bitcoin’s turbulent growth has remained relatively unbridled by regulations or laws. The past 12 months have been no less explosive—investors in Bitcoin have enjoyed the cryptocurrency’s greatest period of growth since its inception in 2009. Many jurisdictions are now establishing regulatory frameworks to deal with the risks of cryptocurrency, and these have the potential to significantly limit the way cryptocurrencies are purchased and traded. This regulatory reform, ranges in intrusiveness, from simple record-keeping requirements to strict licensing regimes, like the BitLicense scheme implemented in New York. Recently, China is looking to more tightly regulate Bitcoin; however, as of now, the only Bitcoin related regulation in China is the Circular of the People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission on the Prevention of Risks from Bitcoin promulgated in 3 December 2013. In many ways, these new laws are beneficial to the development of the technology. But they also stand to radically change the way Bitcoin is used. Changing rules call for a changing approach by Bitcoin investors, particularly for those based or interested in China.