ETHOS — In a move that could potentially boost cryptocurrency mining businesses, the Chinese government has issued a regulatory order allowing cryptocurrency companies to operate in the country.
The order, which was released Friday, said cryptocurrencies could operate within the “public financial system,” including banks, as long as they had to follow a set of rules and regulations.
In other words, cryptocurrency companies are allowed to accept bitcoin and other cryptocurrencies, and they can trade them.
However, the order also said the government wants them to “disclose their existence and their operations to the public.”
While the order was not issued to cryptocurrency companies, it does come as a surprise to many that the Chinese have been moving to regulate cryptocurrency companies.
Bitcoin has been surging since the Chinese People’s Bank of China announced it was suspending all transactions of bitcoin, in order to avoid the black market for bitcoin, and it now has about $2.8 trillion in market capitalization.
But China has a long history of cracking down on cryptocurrency companies and even attempting to shut down cryptocurrency businesses that operate in other countries.
As of April 2017, China was still dealing with several bitcoin companies, according to the Financial Times.
On April 15, the China Securities Regulatory Commission announced it would issue a “red notice” for bitcoin exchanges that had not registered with the government.
The order issued Friday also called for cryptocurrencies to register with the Chinese financial services regulator.
Since the order does not specifically address bitcoin mining, many cryptocurrency companies said they will likely continue to operate, although some said they would not.
“If they don’t follow the regulations, we don’t see a lot of other options for us,” said Michael Bala, CEO of Coinapult.
Bala said his company’s services include trading and selling bitcoin, as well as buying and selling shares of the cryptocurrency, and he was not sure how long the government would let them operate.
“I think it will be a couple of months or a couple years, but I think that will be in the medium term,” he said.
The Bitcoin Investment Trust, the largest Bitcoin-related investment firm, has about 100 employees, according a spokesperson for the firm.
“We are actively exploring all options in our portfolios, including our investment in cryptocurrency,” the spokesperson said.
“We currently have no plans to invest in cryptocurrencies, but have actively looked at other options.”
Bitcoin has also risen more than 500% since the China announcement.
The Chinese government also said that all exchanges that offer cryptocurrency must obtain approval from the central bank.