Did you really believe in the fairytale that, after their government banning big fat cryptocurrency exchanges, the Chinese began a crypto diet abandoning that rich dish to us Westerners, or Koreans?
Not at all!
Coindesk wanted to get to the bottom of it and interviewed Robin Zhu, chief executive officer of the Huobi exchange, one of the most famous in the country.
The response was surprising.
Let us get things in the right order:
– January 2017: Officials from the Chinese Central Bank visited the major exchanges of the country and not only requested the data of their users, but also information on the level of transactions, on the functioning of cryptocurrencies, on the origin and final destination of the fiat currencies exchanged with cryptos, etc..
– September 2017: the Chinese government, against all odds (many expected an impeding regulation) banned ICOs and transactions from fiat to cryptocurrencies, effectively preventing the use of the latter as a form of trading and investment.
– November 2017: the volume of transactions on Chinese exchanges has narrowed drastically: just 5% of the total prior to September.
– Today: the two largest Chinese exchanges, Huobi and OkCoin, are back among the top 10 world exchanges in terms of volume. So much so that Huobi was forced to hire twice as many staff as before September.
What has happened since September? After all, Chinese regulations still forbid changing yuan to crypto and vice versa, while only trades between cryptoes are allowed (and Huobi and OkCoin are exchanges in which only crypto with crypto is betrayed). Nothing has changed since September!
How is it possible then that the Chinese have resumed this trading big-time, despite being unable to convert crypto to fiat currency or change fiat currency to buy other cryptos?
Obviously, the Chinese have found alternative ways to go from yuan to crypt and vice versa…
We are talking about the country in which ordinary citizens have the highest rate of financial/computer literacy in the world.
No country like China has such a high percentage of population using digital money…
You think they would know how to circumvent their government’s bans?
One of the simplest ways would be to use exchanges based outside the country.
For example, Binance, which was launched just two months before the government ban and is based in Hong Kong, ie. outside China, was in the right place at the right time.
Six months after the ban, Binance became one of the most important exchanges in the world in terms of trading volumes, with a peak of 2 billion USD in transactions in just 24 hours.
Now, you do the math and you’ll immediately see where the Chinese are going to exchange their yuan for crypto…
And Binance is just one of many exchanges available.
There are also Japanese and Korean ones, for example… Therefore, give me a solid: the next time you read yet another article that repeats the usual refrain of the Chinese sinking cryptocurrencies, because the government has prevented them from trading them, laugh it up…
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The Team at BlockchainTopNews