Bitcoin in China still chugging along, a year after clampdown
J Thoendell stashed this in Cryptocurrency
A year after China began tightening regulations around Bitcoin, the virtual currency is still thriving in the country, albeit on the fringes, according to its largest exchange.
Bitcoin prices may have declined, but Chinese buyers are still trading the currency in high volumes with the help of BTC China, an exchange that witnessed the boom days back in 2013, only to see the bust following the Chinese government's announcement, in December of that year, that banks would be banned from trading in bitcoin.
This eventually led to a clampdown that scared customers away from the currency, and threw a wrench in the business of local exchanges, including BTC China.
Although financial institutions are banned from dealing in bitcoins, the virtual currency is still legal, and can be traded by individuals willing to take on risk, according to the government. That's given BTC China enough room to operate, deploying a network of people reselling special vouchers that can be exchanged for bitcoins.
The practice has helped BTC China not only stay afloat, but become the exchange with the largest trading volume, according to bitcoincharts.com.
That doesn't mean bitcoin is gaining steam as a currency used to buy goods. Since the government clampdown, the Chinese bitcoin market has matured into one that's focused on speculative trading, said Bobby Lee, CEO of BTC China.