Huobi CEO: PBoC’s Digital Currency ‘Design Ideas’ Differ from Bitcoin

As one of China’s “big three” bitcoin exchanges, Huobi (huobi.com) has been responsible for processing a significant chunk of trading volume, particularly as of late. With over 90% of BTC trading conducted with Chinese Yuan (CNY), the Beijing-based exchange is undoubtedly an important player in the Bitcoin economy.

Also read: Bitcoin’s Next Adoption Phase Imminent as Public Interest Surges

Interview with Huobi CEO, Leon Li

Bitcoin.com spoke with Huobi CEO, Leon Li, on Bitcoin’s rising price, the impact of fee-free trading on overall trading volume, and updates regarding China’s stance on Bitcoin as well as the China’s central bank’s (PBoC) own digital currency plans.

Bitcoin.com (BC): What do you attribute the recent upward Bitcoin price momentum to?

Leon Li (LL): I personally think there are three reasons. First, Bitcoin’s underlying blockchain technology, has became one of the hot technology engines researched by financial giants in the world, this rises investors confidence. The European Central Bank, top 50 global banks, the US Department of Defense and China’s major financial institutions are conducting constant research on blockchain technology, which brings a positive impact to the market. Second, since Bitcoin supply is limited, the soon to come production halve is generating reactions in the market, which is reflected in the price variation. Third, China’s stock market crashed in late April, also the performance of futures and bonds were also not good, which pushed investors to seek for other investment products, such as bitcoin.

“The number of Chinese investors in China’s stock market has exceeded 100 million this year.”

BC: Over 90% of BTC trading volume is in CNY. How much of this is due to the fee-free trading policies of many Chinese exchanges?

LL: Free trading is one of the important reasons of high trading volume. Besides, the number of Chinese investors in China’s stock market has exceeded 100 million this year, equivalent to a third of the US population. The large number of Chinese investors contributes the high trading volume in CNY-BTC. For Chinese investors, the stock market and real estate investment are underperforming, investors in China found themselves pushed to look at other investment channels and one of them is Bitcoin.

BC: Many in the Bitcoin community have downplayed the significance of China trading volume to due to bot-trading. What’s your opinion on this type of trading and does it help or hurt the Bitcoin economy?

LL: In the traditional financial sector, bot-trading is an important part of the market. The United States alone has more than 30 years of history of bot-trading. Bot-trading has became mainstream in the stock and futures market. Bot-trading in Bitcoin market has a good effect, which greatly increases the market liquidity price and softens the volatility during

market fluctuations. It narrows the profitable space when the market is stable. As in traditional financial areas, Bitcoin bot-trading is a double-edged sword and is a well-developed market product and plays an important role in promoting Bitcoin’s development.

Huobi recently […] launched a fast deposit channel to ensure a 10 second arrival. Compared to other exchanges, which require 40 minutes […].

BC: Huobi has seen the highest trading volume as of late, surpassing other exchanges known for their free-fee trading? What is the reason for this surge?

LL: Bitcoin’s volatility and bigger profitable space have attracted new and old customers. Huobi recently made a series of improvements on deposit experience and launched a fast deposit channel to ensure a 10 second arrival. Compared to other exchanges, which require 40 minutes to deposit, the experience on Huobi is really good. Another reason is the long-term impact of our brand. Huobi’s reputation in China has a long-term impact on a number of potential customers. When they choose Bitcoin trading platform, they will come up with Huobi at once.

BC: Are BTC trades on Huobi fee-free? Or are there restrictions in place for various accounts/plans?

LL: Bitcoin trading with CNY is free on Huobi. Internal transfers between CNY spot accounts to USD spot accounts are also free.

BC: Huobi’s exchange recently went down just as the price spiked to almost 3,000 CNY. What was the reason for this outage? Will measures be taken to prevent this from happening in the future?

LL: Our website was attacked, resulting in the slow visit experience in some areas. All Bitcoin trading platforms haves encountered such problems. We strongly condemn such irresponsible hacking. In addition to strengthening prevention, we have established an emergency quick response mechanism when our website is under attack, from IT department to customer service.

BC: What is your stance on the Bitcoin scalability issue? Do you prefer any of the solutions so far such as Bitcoin Core’s SegWit or Bitcoin Classic?

LL: Our attitude has been very clear on this issue and we’ve also expressed it to each party. In the context of not splitting the Bitcoin community, we will support whoever can actually solve the existing problems.

The design ideas of PBoC’s digital currency are different from Bitcoin’s.

BC: Has there been any update from the central government on Bitcoin?

LL: By the beginning of this year, The PBoC (People’s Bank of China) has held a seminar about digital currency and announced to release its own digital currency. President Zhou Xiaochuan said the design ideas of PBoC’s digital currency are different from Bitcoin’s, but Bitcoin’s underlying technology – blockchain is an optional technology. Huobi and three famous Chinese universities (Tsinghua University, University of Political Science and China Criminal Police College) established a cooperative relationship to conduct research on digital currencies and blockchain, providing research support for government regulation on Bitcoin.

BC: Do you expect the relatively hands-off Bitcoin approach to remain in place despite increasing clamp downs on capital outflows by the government?

LL: RMB market is large, which needs precise operation. We are very optimistic about the USD market. Huobi will operate strictly in accordance with government policy.

BC: Anything else you’d like to add?

LL: In China, deposits are quite difficult to solve. Deposit in general exchanges requires normally one hour and in the best case 40mins. This part will harm the confidence of new users and hold back old users’ quick response to the market. Huobi is committed to addressing these challenges. This week, Huobi launched speedy deposit, allowing users to deposit within 10 seconds, which is unique in the industry at the present. The feedback has been very good since the release. Huobi is also committed to achieve the ultimate experience in other parts, such as registration and trading. Huobi will continue to bring new surprises for everyone this year.

PBoC is also studying the feasibility of applying the blockchain technology of digital currency.

Bitcoin’s underlying technology – blockchain has attracted attention of domestic and foreign financial giants. PBoC is also studying the feasibility of applying the blockchain technology of digital currency. Few people or institutions in China are familiar with blockchain technology. Huobi is lucky to have a team, which is familiar with Bitcoin blockchain.

To help promote domestic blockchain concept and application, Huobi set up a digital currency and blockchain research center earlier this year, dedicated to research the principles and application of blockchain. We’ve started the cooperation in information existence proof and traditional finance. Soon, Huobi will release China’s first complete and creative blockchain report – so stay tuned!

How big of a role does China play in Bitcoin’s economy? Let us know in the comments below! 

Images courtesy of cryptocompare.com, realmoneyasia.com, Shutterstock

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