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    Chinese crypto traders are looking for ways to circumvent the ban

    Ray considers himself a heretic. He is determined to continue while many Chinese shut down their digital wallets after Beijing banned investment in cryptocurrencies.

    Ray has already received notification from his crypto exchange that his account will be closed by the end of the year. However, he states: “I am currently considering opening an account on a decentralized exchange.”

    Authorities suspended Bitcoin mining operations in May due to a Chinese campaign against cryptocurrencies.It is consistent with rise Decentralized finance or DeFi allows users to trade with each other without the intervention of banks, brokers, etc., making blocking difficult.

    “I still trade cryptocurrencies on a regular basis,” said a Chinese investor with an overseas bank account. “How can the authorities stop me when the industry evolves to avoid centralized control?”

    The strictest enforcement of cryptocurrencies took place in September, but China first banned crypto exchanges in 2017, and Chinese users are gradually moving to DeFi.

    According to research firm Chainalysis, China’s share of global Bitcoin transactions peaked at 15% in November 2019 and fell to 5% in June 2021.

    For the 12 months to June, mainland China was associated with Asia’s highest $ 256 billion cryptocurrency activity, 49% of which was traded via the DeFi platform. Uniswap, one of the major DeFi exchanges, is currently the second largest exchange in East Asia in terms of trading volume, Chainalysis said.

    While the latest restrictions are blocking entry into the new blood crypto market, experts say, some existing crypto holders are looking to DeFi to continue trading.

    Deng Jianpeng, director of the Center for Financial Science and Technology Research at the Central University of Finance and Economics, based in Beijing, said: “But there will always be people trying to find new investment routes, such as using foreign platforms or using decentralized exchanges.”

    The DeFi protocol does not have the same “knowing customers” obligation as traditional exchanges, which are more tightly regulated. Henri Arslanian, the leader and partner of PwC cryptography, said the use of DeFi “may be banned in China, but it is very difficult to actually monitor because of the anonymity given to the user. “.

    Miha Grčar, Head of Global Business Development at Kraken, a large exchange, said DeFi is “the archetypal era of cryptocurrencies.” He added that the government is thinking about how to regulate it, for example by requiring some form of user identification.

    In an interview Gary Gensler, chairman of the US Securities and Exchange Commission, along with the Financial Times, warned that regulators want more authority over the DeFi platform.

    “Many Chinese are currently studying how to use DeFi, but there is uncertainty about this as well, and the U.S. government is trying to tighten regulations,” said an independent journalist who runs the popular Twitter channel WuBlockchain. Colin Wu said.

    In an interview Gary Gensler, chairman of the US Securities and Exchange Commission, along with the Financial Times, warned that regulators want more authority over the DeFi platform.

    “Many Chinese are currently studying how to use DeFi, but there is uncertainty about this as well, and the U.S. government is trying to tighten regulations,” said an independent journalist who runs the popular Twitter channel WuBlockchain. Colin Wu said.

    Chainanlysis found that countries, such as the United States, China, Vietnam, and the United Kingdom, where historically large institutional investors are armed with large crypto wallets, play a huge role in DeFi. ..

    Owners of large crypto assets are attracted to DeFi because they can make money from coins. Users lend cryptography to the DeFi protocol to provide a liquidity pool for peer-to-peer lending. In return, the investor receives a portion of the transaction fee or token fee.

    However, Chinese investors cannot transfer profits from the DeFi protocol to a Chinese bank account. “The government is breaking the link between cryptocurrencies and fiat currencies,” said Zee Zheng, founder and CEO of SpaceChain, a company focused on space applications for blockchain technology. Chung, a Chinese entrepreneur, moved to Singapore, which is crypto-friendly, four years ago.

    For wealthy Chinese, this is not a problem as long as they can transfer cryptocurrency profits to foreign bank accounts and circumvent capital restrictions.

    Several posts on the 51-bitcoin forum, one of the unofficial crypto blogs, have led investors to register foreign companies, since Chinese social media sites began discontinuing content on cryptocurrencies. We recommend applying to your company’s trading account. Another user provided a list of UK and US financial institutions that allow Chinese-based individuals to open bank accounts to transfer profits from crypto investments to fiat currencies.

    However, in many cases, the additional steps required to invest in digital currencies are not worth the hassle. Chung said: For them, it suffices if the restrictions are strict enough to suspend 99 percent of transactions. ”

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    Chinese crypto traders are looking for ways to circumvent the ban

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    The post Chinese crypto traders are looking for ways to circumvent the ban appeared first on Eminetra.

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