Chinese bitcoin traders still wield ‘enormous influence’ despite Beijing’s 4-year crypto crackdown
May 26, 2021 @ 09:15 +03:00
Chinese bitcoin traders continue to thrive despite Beijing’s four-year crackdown on cryptocurrencies, experts told CNBC. But tough words from Beijing are not new. In 2017, China shut down local cryptocurrency exchanges and banned so-called initial coin offerings (ICOs), a way to raise money for crypto companies by issuing digital tokens.
China’s role in bitcoin was thrust back into the spotlight last week after authorities reiterated that financial institutions should not get involved in cryptocurrency businesses such as trading or helping to exchange fiat into digital coins. These were not new regulations. But it was one of the reasons for the plunge in bitcoin last Wednesday, which at one point fell 30% to just over $30,000 before seeing a recovery.
What has happened to Chinese bitcoin trading?
As China increased its scrutiny of the cryptocurrency sector, a sort of grey market was created. Chinese exchanges such Huobi and OKEx moved offshore since they were not able to be licensed on the mainland. Some of these platforms offer crypto-to-crypto trading such as buying bitcoin with the U.S. dollar-linked stablecoin called tether (USDT). Some platforms offer a renminbi to USDT conversion service which allows Chinese users to get the crypto required to buy bitcoin.
Chinese bitcoin traders still wield ‘enormous influence’ despite Beijing’s 4-year crypto crackdown, CNBC, May 26