Chinese Bitcoin exchanges introduce trading fees, following the recent investigation from the People's Bank of China. How this move influences Bitcoin?
25 January, AtoZForex – Starting from January 24th, 2017, four major Chinese Bitcoin exchanges have officially commenced charging trading fees to all users, investors, and traders. Specifically, these exchanges include BTCC, OKCoin, Huobi and Yunbi.
Chinese Bitcoin exchanges introduce trading fees
The world’s oldest and biggest Bitcoin exchange, BTCC, has announced its agenda in relation to the execution of trading fees on January 20th. Furthermore, other exchanges have followed the practice. They announced their official decisions to charge trading fees to Chinese users right after the announcement of BTCC.
The BTCC, OK Coin and Huobi have been recently inspected by the People’s Bank of China (PBoC). Earlier this month, The People’s Bank of China has decided to inspect the Bitcoin enterprises across China. The formal statement of the central bank can be found on the official website of the PBOC in Mandarin. Chinese central bank appeared to be closely eyeing the companies that are allegedly operating “beyond the scope of the enterprise and the market.”
The Bitcoin exchanges have decided to set the trading fees at 0.2 percent, as a fixed charge to all users trading digital currency on Chinese Bitcoin exchanges. Moreover, Yunbi has follows the practice and introduced a 0.2 percent trading fee commencing on January 24th.
What are the potential consequences for Bitcoin industry?
Additionally, BTCC and OKCoin have released alike statements on their official websites in regards to the trading fee rationale. Both exchanges stated that they decided to introduce the trading fee in order to limit market manipulation practices and high volatility. Moreover, the BTCC official announcement is stating:
“BTCChina, our CNY exchange, will start charging fees for Bitcoin and Litecoin trading from 12 p.m. UTC+8, Tuesday, Jan. 24th. We are implementing fee-based trading to curb market manipulation and extreme volatility.”
The announcement of OKCoin has addressed the issues noted by the PBoC during the initial examination of OKCoin and Huobi. The local media has been reporting that the central bank of China was highly concerned with the offering of margin trading services. Moreover, the bank was reportedly worried about the absence of trading fees. Reportedly, they have resulted in “abnormal price fluctuations in the market.”
The introduction of trading fees has a larger significance for the Bitcoin market. The founder and the Chief Executive Officer of CryptoCompare, Charles Hayter, and blockchain products lead at ARK Invest, Chris Burniske, believe that such changes will allow the industry to continue growing in China. This could limit the recent Bitcoin rally.
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