China set to shutter digital currency exchanges: report

The People’s Bank of China (PBoC) has drafted instructions banning Chinese platforms from providing virtual currency trading services, the Wall Street Journal reports, citing people familiar with the matter.

The central bank undertook the move after working with other regulators, reaching a consensus to shutter the domestic cryptocurrency exchanges, according to the report.

Regulators informed at least one of the exchanges about the closure decision, a source was quoted as saying.

The unwinding could take several months.

Ending commercial trading in all virtual currencies is likely to further diminish use of bitcoin in a large and once-promising market. 

Beijing, however, isn’t banning people from investing in virtual currencies. China hosts some of the world’s largest bitcoin miners—the operations that generate the cryptocurrency.  

Bitcoin prices have fallen about 16 percent from a record high on Sept. 1 as regulators moved to cool the market, issuing a ban last week on initial coin offerings. 

Authorities have ramped up scrutiny of the domestic bitcoin market and other virtual currencies since the beginning of the year—part of a major government effort to root out financial risks.

Virtual currencies in theory can allow holders to bypass the traditional banking system to move money outside of China’s capital-controlled borders. 

Officials from the central bank, cyberspace administration and banking, securities and other regulatory bodies considered various options for months but ultimately came to a consensus to shut down virtual currency exchanges, sources told the Journal. 

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