- China won’t be banning crypto mining as initially planned
- Banks and other financial institutions are all anticipating the launch of the State’s digital currency
- Watchdogs in Hong Kong have introduced new crypto restrictions that will protect investors
On November 6, 2019, the Chinese government decided not to eliminate the cryptocurrency mining industry from the country in a new final plan.
China reportedly made a U-turn on its plan to ban cryptocurrency mining by removing it from the finalized list of industries that are supposed to be eradicated.
Bitcoin has been banned in the country since 2017 but local miners still control more than 70% of its hash rate.
In April 2019, the National Development and Reform Commission (NDRC) released a draft list that contained inefficient and dangerous industries that were supposed to be eliminated.
The NDRC suggested that local provinces should ban cryptocurrency mining since it wastes resources and damages the environment.
Nevertheless, after months of enquiring from the public, the NDRC finally published the revised version of the draft, and it is now crystal clear that China doesn’t plan to get rid of crypto mining.
China’s Digital Currency to Kick Off ‘Horse Race’
In related news, a central bank official said on November 6 that imminent China’s digital currency would create a “horse race” when it is launched as banks, and other establishments compete to provide the best services using the new form of currency.
Mu Changchun, the head of the central bank’s digital currency research institute, told a forum in Hong Kong that the government will first issue the digital currency to commercial banks and other institutions, who will then resend it to the general public.
Mu added that China’s digital currency is designed to substitute existing coins and paper money and its holders will not receive interest payments.
Cryptocurrency Rules Unveiled by SFC
On November 6, 2019, Hong Kong’s financial watchdog unveiled a comprehensive set of regulations governing cryptocurrencies in a move to enhance investor protection.
The new guidelines, unveiled by the Securities and Futures Commission (SFC), will target funds that are invested in cryptocurrencies as well as the exchanges on which these digital currencies are traded.
The guidelines will reportedly ban retail investors from trading Bitcoin via these funds or platforms, but allow professional investors.
Ashley Alder, head of the SFC, first announced initiatives on digital currencies at Hong Kong’s 2018 Fintech Week a year ago, where he stated:
“This will help Hong Kong to be among the top cryptocurrency trading centers worldwide because proper regulation is very important for attracting big players. To afford better protection, only professional investors should be allowed to participate for the time being.”
These pioneering set of rules governing the crypto market could help turn Hong Kong into a major cryptocurrency hub, according to analysts. Exchanges can apply to be regulated from Wednesday, November 6, 2019.