Friday, December 9, 2022

Huobi Shuts Its Doors in China, Opens Several More Around the World

Huobi Shuts Its Doors in China, Opens Several More Around the World

It’s a sign of the times in many ways. Huobi, the Chinese cryptocurrency exchange near the top of the world trading volume charts for four years, today formally ceased RMB (yuan) trading activities. It’s not the end of the road, though — the Huobi name will now appear on several Bitcoin and digital asset-related business entities in China and worldwide.

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Huobi China to Become a Blockchain Consultancy and Research Firm

Huobi’s name is almost synonymous with Bitcoin in China. Along with OKCoin and BTCChina, it made up the “big three” crypto exchanges that got the lion’s share of news and attention. As previously promised, OKCoin also announced cessation of RMB trading today.

Huobi founder Leon Li
Huobi founder Leon Li

Huobi China, the original company, will still exist — but not as an exchange. It’s pivoting away from cryptocurrencies to become a blockchain consultancy and research firm.

Or as founder Leon Li put it, “a professional integrated information and research service provider in the vertical field of blockchain, dedicated to providing users in Mainland China with professional, in-depth, cutting-edge information about blockchain technology.”

The rest of Huobi’s autonomous family tree includes a number of different businesses around the world.

The company will continue operating its established independent operations in Singapore, Hong Kong, South Korea and elsewhere. Singapore is home to Huobi Professional, a digital-only exchange that lists 10 popular assets and also has a branch in Hong Kong.

Huobi Korea will carry on exchange trading as usual, in Korean won (KRW). “Huobi Exchange” will also continue trading digital assets against USD. Beijing-based Huobi Wallet, a user-friendly digital asset storage service, will also continue.

‘Watershed’ Moment in China’s Digital Asset History

Li posted a bulletin announcing the changes on the site earlier today, China time. Calling the process a “business adjustment”, Li called the pivot “not only a milestone for Huobi, but also a watershed in the history of Chinese digital assets and even a memorable day in the development of global digital assets.”

The emergence of the Internet drives the disintermediation of information and humanity has entered the era of we-media; cryptocurrency and the block chain technology are propelling the disintermediation of credit, which will push humanity into an era of we-finance. In the foreseeable future, the global regulation of financial activities will be directed legislation and regulation from licensing agencies to individual financial activities.

Chinese Exchanges Probably Not Returning to Past Glory… In China

There was some speculation Chinese exchanges might quietly return to business as usual once the five-yearly Chinese Communist Party Congress wrapped up in Beijing. That now seems less likely — China’s shift in thinking on speculative trading of Bitcoin and other cryptocurrencies could be permanent.

No longer will China directly drive the BTC price. But at the same time, its prominent local companies have matured and gained international experience. Bitcoin doesn’t need Chinese RMB traders anymore, and exchanges have found lucrative markets elsewhere.

Huobi Pro and OKCoin’s OKEX will live on as P2P trading platforms. However, it’s still a long way from the kind of mad electronic volumes that both companies always said were due to high-frequency trading via their APIs.

Huobi & OKCoin, moving forward as Huobi Pro and OKEX
Huobi & OKCoin, moving forward as Huobi Pro and OKEX P2P trading platforms

Huobi’s statement also noted it (and other exchanges) had received official notices from the regulator on 15th September, and blocked both new accounts and RMB deposits starting that same day.

As the quote above suggests, Li remains a big believer in cryptocurrencies personally. His post bemoaned the fact that digital assets “attracted morbid speculation in some markets” and tentatively agreed with China’s approach.

However, it also said: “Digital currencies, as a new form of finance technology, has led to a great stir and will bring profound changes to the global financial system.”

It will be interesting to see what part Huobi and its children will play in bringing about those changes.

Are you a Huobi customer? What’s your opinion of the company and its products? Let’s hear your thoughts.

Images via Huobi, Pixabay

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