Chinese Bitcoin Exchanges Impose Trading Fees
Global political tensions in the last few months have resulted in cryptocurrencies spiking as speculators look to capitalize on uncertainty around the globe.
This volatility has resulted in manipulation of the price of bitcoin and has got governments once again questioning the regulation of this unpredictable virtual commodity. China is one such country as three of their largest bitcoin exchanges BTCC, OkCoin and Huobi have announced via their websites that their traders will have to pay a 0.2% trading fee for each transaction. This move is aimed at preventing manipulation and reduce volatility according to Huobi. Chinese domestic exchanges have been extremely successful until now as no transaction fees were imposed and many Chinese used the digital currency to circumvent capital control in China.
The price of Bitcoin reached as high of $1,184 at the beginning of the year but has dropped by around 10% as the central banks People’s Bank of China (POBC) announced they will impose stricter controls on the currency. To add to the problem, China’s currency has sunk to a low not seen since 1994 against the U.S. dollar with a drop of 7 percent. As part of the PBOC‘s efforts to stem the currency falling further against the dollar and people turning to virtual currency, stricter regulations were put in place.