China's Big Three Bitcoin Exchanges Suspend Margin Trading, But Questions Remain
A group of central securities depositories (CSDs) is working with stock exchange operator Deutsche Börse on a new blockchain-based solution aimed to improve collateral management. CSDs from Canada, Luxembourg, Norway and South Africa – all members of the Liquidity Alliance – are working with the stock exchange firm to create what they have dubbed the “LA Ledger”. The initiative is currently in the prototyping phase, using the code underlying the Hyperledger project as its basis. The firms involved are looking to seek approval for the solution from regulators later this year, according to....
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As Bitcoin exchanges in China halt margin trading, zero-fee trading may also be on the chopping block as the industry awaits regulation. China Halts Margin Trading Following the inspections conducted by the People’s Bank of China, the country’s ‘Big Three’ Bitcoin exchanges BTCC, OKcoin and Huobi have stopped margin trading services. Although no official statement from the PBoC has been issued regarding the legality of the margin loan services, media reports state that the platforms’ margin trading “violated rules” and resulted in abnormal price volatility. BTCC CEO Bobby Lee reacted to....
Coinbase plans to suspend all margin trading contracts effective tomorrow, and will end the service entirely by next month.
All things considered, it looks like Chinese Bitcoin exchanges are evolving in the right direction. Chinese Bitcoin exchanges have operated on the promise of not charging trading fees for quite some time now. Instead, most trading platforms made a lot of money from their margin trading opportunities. Now that most exchanges no longer offer high-value margin trading, they also see a large source of revenue disappear. It is likely a lot of these platforms will reintroduce trading fees over the coming weeks. Operating on 0% trading fees was never designed to be a long-term solution for....
Last week’s warning from the PBOC to its citizens about the risk of investing in bitcoin and the following on-site investigations at China’s three largest bitcoin exchanges, OKCoin, Huobi and BTCC, spooked bitcoin investors and pushed the price down to its current trading price in the low $800s from recent highs above the $1,000 mark. Margin Trading Halted at Chinese Exchanges. The first result of the PBOC’s on-site checks at the exchanges, which were conducted to look into possible market manipulation, unauthorized financing and money laundering, was that all three exchanges initially....
Eliminating margin trading is the most positive outcome for cryptocurrency as a whole. The Bitcoin price has always been subject to a lot of speculation and expectation. It is rather difficult to predict how cryptocurrency valuations evolve these days. Now that Chinese exchanges are no longer offering leveraged margin trading like before, things are looking very good. Contrary to what some people expected, Bitcoin’s price has not diminished. In fact, the value has gone up again now that market stability has been achieved. It should come as no surprise to anyone the recent changes among....