Though, according to the people familiar with the matter, the ban will only apply to trading of cryptocurrencies on exchanges. The information is yet private and there hasn’t been any official announcement. While the China’s central bank couldn’t immediately comment on the matter.
Currently, China is the biggest market of the virtual currency as it accounts for about 23 percent of bitcoin trades and is also home to many of the world’s biggest bitcoin miners.
“Trading volume would definitely shrink,” said Zhou Shuoji, founding partner at FBG Capital and the cryptocurrencies investor. “Old users will definitely still trade, but the entry threshold for new users is now very high. This will definitely slow the development of cryptocurrencies in China.”
While Beijing’s motivations behind the move are unclear, the ban is unlikely to have a major impact on the prices of cryptocurrencies globally because venues outside the country will continue trading, according to FBG Capital’s Zhou.
At one point in the past, exchanges in China accounted for more than 90 percent of the world’s bitcoin transactions, but the country’s role in the bitcoin market tarted shrinking in recent months as authorities tightened regulation.