Coinbase is now allowing users in mainland China to register accounts with a Chinese national ID and local address. This change signifies a notable shift for the platform, which had previously limited verification options for Chinese residents.
The information about this development emerged from feedback collected by Odaily, a Chinese-language cryptocurrency media outlet. The report mentioned a Chinese-language Coinbase signup page, indicating that the exchange has established infrastructure to facilitate onboarding for users from mainland China. This change effectively removes the barriers that previously hampered most mainland residents from engaging in trading activities due to strict Know Your Customer (KYC) requirements.
Coinbase has yet to make an official announcement regarding this update, which suggests that the company could be evaluating user interest and potential regulatory implications before proceeding further.
What preceded this change, and how does it relate to historic regulations?
In September 2021, the People's Bank of China implemented stringent regulations banning cryptocurrency trading, mining, and other related services. This crackdown targeted not only domestic operations but also aimed to curtail services offered by foreign exchanges to Chinese users, making their operations illegal. Despite these regulations, many crypto enthusiasts in China have developed workarounds, such as using VPNs, to access overseas exchanges, creating an unregulated market that operates beyond the purview of the authorities.
The 2021 ban was part of a broader pattern of restrictions dating back years, with initial coin offerings banned in 2017 and continual pressure on domestic exchanges.
What does this shift mean for the cryptocurrency market?
The decision to allow Chinese national IDs indicates a strategic move for Coinbase, aligning with its recent initiatives in other international markets. For instance, the company resumed allowing users in India to register in late 2022 after resolving prior regulatory issues. The absence of public acknowledgment from Coinbase hints that the company is cautiously testing market waters, assessing how users and regulators respond to this easing of restrictions. The People's Bank of China has a history of swift action against any perceived violations of its cryptographic prohibitions, which could create potential risks for the exchange if formal engagement with Chinese users progresses.