Chinese bitcoin exchanges consider leaving China

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Image: http://www.flickr.com/photos/duyhoa_dao/

Image: http://www.flickr.com/photos/duyhoa_dao/

Chinese bitcoin exchanges have had a rough month. They’ve seen the price plummet, several rounds of sell-off panic and dealt with unprecedented levels of insecurity for their own financial accounts. Just a few days ago, many of the major Chinese exchanges were informed by their banking partners that most of their current deposit services and accounts will be terminated on April 14, the day before long-rumored changes from the People’s Bank of China are to take effect.

Not surprisingly, the exchanges are moving their business to more stable ground. In the last week, both Huobi and OKCoin have announced plans to expand operations beyond China. Such an expansion would prevent Chinese authorities from terminating their accounts, although access to the lucrative Chinese market would be hampered without native banking partners. It is not clear where the exchanges would relocate to, as there are several countries in the region with bitcoin-friendly policies.

Adding to the confusion, however, is the still-unclear position of the People’s Bank of China. The rumored April 15 crackdown on accounts is still completely (and suspiciously) unconfirmed, and the only report on such a policy existing comes from a single article on China’s Caixin news service. Although many banks have opted to close the accounts of bitcoin exchanges in anticipation of the April 15 announcement, there has been no official confirmation of such a directive coming from the PBoC.

As reported on CoinDesk, Huobi’s staff has been quite vocal about the impact of the rumors on their business.

No bank branch has received official documents requesting the termination of business relationships with bitcoin exchanges. … Each bank’s interpretation and execution of the policy is different, and so it may be that the current situation is an over(ly careful) reading of the policies by the authorities, and so it is not necessarily the case that all banks will stop business with bitcoin exchanges.”

There is also mounting evidence that fears of a central bank crackdown are overblown. Yesterday, People’s Bank of China governor Zhou Xiaochuan told an audience at the Boao Forum that banning bitcoin was “out of the question” and was considered by the PBoC to be “collectable asset,” like stamps, rather than a currency.

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