Crypto regulations to tighten in China?
- It appears that the cryptocurrency regulations in China are tightening up, causing some changes in the crypto landscape.
- Binance CEO Changpeng “CZ” Zhao believes that tightening regulation could lead to Chinese cryptocurrency operators to team up.
According to a recent South China Morning Post report, the crypto market in Asia is drawing regulatory scrutiny. In 2019, Chinese President Xi Jinping had urged for further investments in blockchain technology, causing Bitcoin to mark an increase of 40% in less than 24 hours. However, it now seems like the regulations are tightening up, resulting in some changes in the crypto space, according to Changpeng Zhao, CEO at Binance.
This regulatory scrutiny could purportedly increase mergers and acquisitions (M&A) in the field. While the number of M&A cases dropped 40% to 114 (the US accounts for half of them), Asia’s share rose from 14% to 22%. CoinMarketCap, a well-known data monitoring resource, was recently acquired by Binance.
Zhao said:
In Asia, we are interested in exchanges that have existing banking relationships, which enable them to accept trading in local fiat currencies.
Additionally, Zhao believes that there will be a consolidation as the higher regulatory requirements will make it more difficult for small exchanges to survive. On March 13, the daily turnover of Bitcoin reached a record of $75.9 billion, causing some cash-rich crypto exchanges to consider acquisitions of smaller rivals and invest in new businesses. Zhao said that they “usually spend about a quarter of our profit on investment opportunities every year, as we grow our portfolio of businesses beyond just trading.”
Author
Rajarshi Mitra
Independent Analyst
Rajarshi entered the blockchain space in 2016. He is a blockchain researcher who has worked for Blockgeeks and has done research work for several ICOs. He gets regularly invited to give talks on the blockchain technology and cryptocurrencies.
