Crypto Craze in China: Underground Booms Despite Official Ban

Despite a government ban, the Chinese crypto market is thriving, driven by investors seeking alternatives to a sluggish economy and underperforming stocks. This article explores the creative ways Chinese citizens are accessing crypto and the implications for the global financial landscape.

Fueling the Underground:

  • Investors bypass restrictions through OTC trades, peer-to-peer networks, and Hong Kong's open crypto market.
  • Mainland citizens utilize forex quotas to move funds to Hong Kong crypto accounts.
  • China's ranking in P2P trading volume skyrocketed from 144th to 13th in 2023.

Booming Market, Blurred Lines:

  • $86.4 billion in raw transaction volume recorded between July 2022 and June 2023, exceeding Hong Kong's activity.
  • Large retail transactions in China double the global average, highlighting investor enthusiasm.
  • Brick-and-mortar crypto exchange stores operate in Hong Kong, catering to demand for anonymous purchases.

Official Stance: Mixed Signals:

  • Despite the ban, Chinese officials seem aware of Bitcoin's potential and its growth prospects.
  • Endorsement of Hong Kong's crypto trading suggests a strategic intent to remain involved in the global industry.

Tech Giants Explore Web3:

  • Major players like Tencent and Huawei participate in international Web3 events and conferences.
  • While navigating the ban on crypto trading, they offer computing resources to cater to Web3 startups.

Key Takeaways:

  • China's crypto market thrives underground, fueled by investor demand and creative workarounds.
  • The government's mixed stance highlights a potential disconnect between official policy and market realities.
  • Chinese tech giants' involvement in Web3 suggests their future engagement with the broader blockchain ecosystem.
Author: Denis Tabyrtsa

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