China Bitcoin exchange head 'surprised' at speed of regulations

The head of the Bitcoin exchange was caught off guard by the announcement of new regulations in China

Bobby Lee, CEO of BTC China, speaking at Stanford University on December 5, 2013

Bobby Lee, CEO of BTC China, speaking at Stanford University on December 5, 2013

The head of China's top Bitcoin exchange didn't expect the Chinese government would act so soon in taking its first step to regulating the digital currency, but said he welcomed controls.

"I was surprised they were so fast," said Bobby Lee, CEO of BTC China. He claims his company is the largest online marketplace in the world where people can buy and trade bitcoins.

Lee was speaking on the sidelines of a presentation he gave at Stanford University on Thursday evening about Bitcoin in China. They were his first public comments since the Chinese government announced earlier in the day that it would not let banks trade in bitcoins and would require domestic traders to use their real names when registering with exchanges.

Bitcoins can be thought of as digital tokens, bought and sold through online exchanges like BTC China. The currency is based on cryptographic algorithms and people either buy bitcoins with conventional currency or have their computers perform complex mathematical tasks to "mine" bitcoins. Around 12 million bitcoins have been mined to date and about 150 new coins are created every hour. That rate is continually slowing as the currency approaches its theoretical maximum of 21 million bitcoins.

"The bitcoin is a special kind of virtual product, it does not have the same legal status as a currency," Chinese authorities said in an online posting earlier on Thursday. "It should not and cannot be used as a currency circulating in the market." The posting came from the nation's regulators, including the People's Bank of China and the ministry that oversees the tech sector.

Lee wouldn't be drawn on the implications of the regulations. He said he hadn't had enough time to study them, but he did welcome the idea of regulating Bitcoin.

"We're actually pro-regulation," he said. "We operate in the China market and we want the government to regulate the Bitcoin exchange business. We want to make this a more formal business, to have more rules in place so that we can legitimately protect the customer's interests, to protect their funds. Otherwise exchange businesses come and go, they steal customer's money, they get hacked, there are a lot of problems."

The Chinese government made its announcement while Lee was on a plane heading towards the U.S. In addition to his speech at Stanford, he is also scheduled to attend a Bitcoin conference in Las Vegas next week.

During his presentation, which had been prepared before the new regulations were announced, Lee said "the future for Bitcoin is bright in China."

He cited data from his customers that showed 60 percent of people were buying or trading the coins as an investment. One third of those were looking at Bitcoins as a short-term speculative play while the remainder said it was a long-term investment.

The price of bitcoins has surged in the last few months, rising from around US$200 to currently over $1,000.

Lee credited the popularity of Bitcoin in China to several factors, including the high rate of savings among the population, that many people are good at math, and that Chinese consumers love to try new things.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags governmentregulationinternetBTC China

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?