The Chinese secretly acquire cryptocurrencies
According to studies, about 100 thousand Chinese secretly buy and sell digital coins. The problem is that China has introduced the strictest ban on the circulation of digital coins. The government seeks to control the circulation of cryptocurrencies, so traders have to go underground. Gray transactions were discovered in an independent study from Beijing-based Sino Global Capital. The company checked the turnover of the local market and found that about 100 users work informally. Further we will tell you what is the reason for such a difficult trend and how a similar phenomenon affects the market. So let’s get started.
What do locals use?
Chinese legislation spells out specific regulatory measures regarding cryptocurrencies. Not a word is said about stablecoins. That is why Chinese traders use the popular USDT coin. The digital asset is tied to the dollar, and therefore, because of the special pricing, it is not a cryptocurrency. The coin works on unique dimensions that allow you to quietly make digital payments without attracting much attention from law enforcement agencies. Recall that unofficial work with cryptocurrency in China introduced real criminal liability. We also note that USDT is only part of a complex Chinese scheme. The coin is used specifically for operations with cryptocurrency, it is not an independent asset in Chinese realities.
Roughly speaking, a progressive Chinese trader acquires USDT, and then starts working on a third-party exchange. The study shows that gray exchanges are used for operations with digital currencies. The sites are not registered in China, most often the platforms are located in countries with the easiest legislation. Panamanian resources become a frequent choice, because in this country there are enough problems in addition to the turnover of digital money. Thus, Chinese traders have developed their own system that allows you to circumvent legislation. Of course, there are still risks. Since this trend was able to highlight third-party experts, most likely, the government is also in the know. But attracting traders to punishment is incredibly difficult, since formally, they operate within the law.
How do the Chinese influence the market?
It should be understood that China is a leading country in many matters. The global economy is partly dependent on China; the labor market also consists of Chinese workers. And in the digital industry, Chinese opinion is also taken into account. It is very bad that such a serious market player has a negative attitude towards cryptocurrencies. Complete distrust, the desire to control and oppress the coins – this is terrible. Such an advanced financial instrument will never be fully disclosed without government support. Statistics show that the average amount that the Chinese buy cryptocurrency is $ 1,400. Unforgivably small numbers indicate that traders are banally afraid to conduct more significant transactions. And their fears are justified, because a large translation will certainly attract attention.
So, instead of legalizing clear and efficient transfers, China independently creates gray financial schemes. The logic is not clear, and the motives of the government so far remain secret. Given that the development of the digital renminbi is already underway, it would be logical to start popularizing cryptocurrencies. But the state is in no hurry.
The problem is also that the Chinese example may inspire other countries to also introduce bans on working with crypto. It is likely that soon we will hear bad news about new restrictions. In order not to miss these and many other events from the crypto industry, follow all the news with us. We publish only high-quality and interesting material. Thank you for the attention. Good luck!