The attack on crypto in China is continuing in the media. This is because the ban on cryptocurrency trading is still not working. Most Chinese investors have found underground ways to proceed with the crypto trading in the nation. The Chinese authorities began to crack down on virtual currencies last September. Initially, they only banned ICOs. Later, they went after all local exchanges in the country. The ban came to a decisive conclusion on September 30th, when BTCC, the oldest crypto exchange, was shut down following pressure from regulators.
At the height of trade, the Chinese Yuan represented 90 percent of all fiat currency used to purchase Bitcoin. Since the shutdown, the figure has fallen to less than 1% of all fiat currency trade. This ban was followed by various measures that dampened the profitability of the digital currencies in the nation. Most companies that used to operate in China were forced to move to friendly countries such as Canada and Switzerland.
Other Underground Channels to Trade
Since the ban in September, various channels have opened in China, which let traders operate. This has been making government efforts to enforce the ban a bit difficult. To engage in trade, all that one requires is a VPN, and he or she can access offshore exchange in places such as Japan and Hong Kong.
Another method being used in China is websites, known as the fire monkey network. They allow traders to purchase digital coins via peer-to-peer transactions. The payments can then be made via Alipay. The Alipay platform is a popular mobile and online payment platform that was created in 2004 by Alibaba.
The media has also reported that there are numerous OTC platforms, which allow the trade of digital currencies in China. However, these companies host their servers outside the country. Despite this, the government has ramped up efforts to block any such activity. Such efforts include Baidu, a search engine, and Weibo, a social media platform, which have been banned from running ICO ads.
Despite this, Weixin, the popular messaging app from Tencent, and QQ, have seen a growing number of crypto trading groups. Wechat users in China have a money transfer option that allows them to link their Wechat account with their bank. The intentions of China are two-pronged. Some suggest the ban on ICOs is intended to help stabilize its financial services sector, which is seen as posing a major risk to the economy.
The other reason is the lack of control over crypto. The government maintains control over many aspects of Chinese society. In fact, many industries are state-owned in the nation. Besides this, the Chinese central bank is testing its own crypto. With such a cryptocoin, the government would be able to maintain control over the activities of its people.
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