World’s largest Bitcoin exchange in China seeks government recognition as a currency, but will officials listen?

BTC China, the world’s largest Bitcoin exchange, is approaching major state-run financial institutions including the People’s Bank of China, the China Banking Regulatory Commission, and the China Securities Regulatory Commission in an attempt to solidify Bitcoin’s place in the Chinese market.

The negotiations are still in the early stages. Bloomberg reports BTC China’s CEO Bobby Lee has had “low-level discussions with regulators,” but he’s not been able to arrange any high-level meetings yet.

Lee says he’s advocating to get Bitcoin out of it’s current “gray area” and onto more solid footing. Essentially he wants the government to officially say it can be used to buy goods and services. While many Bitcoin enthusiasts say the government should stay out of Bitcoin altogether, others argue government recognition and even regulation are good for the long-term health of the cryptocurrency.

Chris Woods, the co-founder of China-based Bitcoin-oriented clothing e-store Bitfash previously said, “We’re going to have to work with governments to get them comfortable, because this is compulsory for mainstream development for people to get comfortable.”

Late last month, vice president of the People’s Bank of China Yi Gang said for the first time that China is “unlikely to acknowledge the legitimacy of Bitcoin in the near future.” He did, however, say that people have the right to trade it freely as a virtual commodity on the internet. Lee says that’s a stark contrast to half a year ago “when I was very much unsure of Chinese opinion.”

A handful of brick-and-mortar businesses that accept Bitcoin already exist in China, but it’s far from widespread. Bitcoin is exploding in China, but mostly among speculative investors.

(See also: What’s really going on in the Chinese Bitcoin community)

Shortly after overtaking Japan’s Mt. Gox as the world’s largest Bitcoin exchange, BTC China closed a $5 million funding round. At press time, one bitcoin is valued at $1084.

(Source: Bloomberg)

(Editing by Steven Millward)