The People’s bank Of China has officially begun discussing regulatory policies which will be implemented to protect user’s rights when using Bitcoin exchanges. A paper was released essentially outlining the plan of actions to increase AML and KYC practices at Bitcoin exchanges. While this will compromise the privacy and anonymity of users, the bank hopes standardizing these policies across exchanges will bring added safety to the customer and help contribute to a lower rate of money laundering which the country has seen associated with cryptocurrencies.
The paper supposedly outlines the increasing use of KYC procedures which will inevitably increase withdrawal and deposits times for many users. Furthermore first time users will also have to present identity documents and on site verification to trade. Concerning trades over $7200 video certification will also be required online, in an effort to restrict exploitation of cryptocurrencies for money laundering purposes. In addition to encouraging exchanges to report questionable transactions and signs of fraudulent activity directly to the peoples bank.
“The transaction data synchronization to the regulatory authorities, as the basis for regulation, from these data can also be found in some of the money laundering information and abnormal transactions,” Zhou Xuedong [Translated from Chinese]
To conclude it is hoped that an eventual regulation on Bitcoin in the country will help legitimize Bitcoin exchanges which have often had to cease services waiting for announcements from the bank on legality of practices. While withdrawals across a whole host of Bitcoin exchanges based in china are still on hold, since intervention from the Peoples Bank Of china, regulations outlined in the paper are aimed to streamline the process of Bitcoin trading allowing users to eventually cash out coins held in limbo. Regulation may seem unsightly and counter intuitive, but the recognition of Bitcoin as a currency will allow much more freedom for Bitcoin oriented industries in the country encouraging its use in various exports to countries such as Nigeria.