China has been keen on regulating the cryptocurrencies; today, CEO of Chinese bitcoin exchange BTCC has noted that a regulation is a must so the risk of having cryptocurrency going wild and out of control can be apprehended. The announcement shortly follows the massive price swings from two major and popular coins in the market, the Bitcoin, and Ethereum.
Massive Price Volatility
The massive price volatility from both Bitcoin and Ethereum has prompted the Chinese-based coin exchange to propose and suggest a type of regulation to keep this kind of madness at the minimum. A prime example is when Bitcoin plummeted last May; the cryptocurrency suffered a massive 19% drop in its price and an estimated $4 billion of value were thrown out.
On the other hand, Ethereum suffered a massive dip of 10 cents from the $319 levels last month on the cryptocurrency exchange GDAX in a matter of seconds. These kinds of volatility are what BTCC CEO’s Bobby Lee fears; even other analysts are saying that Bitcoin may hit the $100,000 levels because of the massive price volatility.
Lee’s Proposed Regulation
Bobby Lee said that "I think regulation is much needed for this new asset class because otherwise, it'll run amok from society," and "But the challenge is how to craft the rules around this new technology," he said on the sidelines of the Rise conference in Hong Kong. Lee added, "I think it's taking the lawmakers and regulators some time to wrap their minds around it, and to come up with the appropriate rules and laws to govern companies, how we do business, to govern individuals (and) how people conduct business online."
PBOC Plans for Regulation
A handful of regulators are also peeking on different methods for the regulation of the digital currencies; the most recent one is with the People’s Bank of China, they managed to take a step forward with their regulation plans on the market. Their plan includes assigning and the building of a task force for inspecting and guaranteeing bitcoin exchanges for any potential anti-money laundering cases and other illegal breaches.
They also managed to contain and warn a bunch of digital currency exchange sites on violating any possible violations, but a lot of investors and analysts are saying that the move can be a possible crackdown and a possible move to stem capital outflows. CEO Bobby Lee retaliated and said, "It's not really a crackdown," he said. "The central bank previously was not very aware of the details of how Bitcoin is utilized, how bitcoin is traded."
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