Saturday, October 1, 2022

Amid Ban On Crypto-Related Services In China, Individuals Buying Bitcoin

China has not been a very big fan of cryptocurrency, its latest decision of banning cryptocurrency exchanges in the country could be considered as a good example of that. Its recent outburst against the digital assets drove a brutal sell-off in bitcoin market. 

However, the retail traders, miners and the crypto finance firm in the country have a different view on the matter. They believe that ‘Beijing’s bark is louder than its bite.’

On Tuesday, when China restricted the banks and payment companies from offering their services for crypto-related activities, the market experienced a sell-off of digital assets. The sell-off further wipes off the market capitalization of cryptocurrency worth $1 trillion.

But on Thursday, it appeared that the latest rule, which has been imposed to cripple the crypto industry, is baseless. Although the authorities imposed the ban, still on May 20, the Chinese investors were seen buying cryptocurrency. Also, the mining firms are operational in the country. They have released new schemes for the miners promising a juicy return.

According to Bobby Lee, the founder and CEO of cryptocurrency wallet app Ballet, the regulators released the recent notification to protect the retail investors from volatile market. However, it would be a challenging task for the banks to identify crypto-related activities in the country.

“If you look at the banking activity in China, millions or maybe billions of transactions happen on a daily basis. From all that … how many are actually really crypto services versus dining or e-commerce? It’s almost unknowable,” said Lee.

This is not the first time China restricted cryptocurrency-related activities. The authorities took a similar decision in 2013 and in 2017, but the recent ban has widened the range of prohibited services. These frequent bans highlighted that it always has some loopholes.

Although the Chinese authorities banned crypto-related activities, the individuals were still able to purchase the digital asset and trade them on exchanges like Binance, reported Reuter on May 20. 

Further, it has been reported that individuals made their payments for purchases through banks or online payment platforms in over-the-counter (OTC) markets.

The crypto miners are also fearlessly operating the mining activity in the country, despite the ban. They believe that it would be difficult for the authorities to track the transactions on the platform.

Meanwhile, there are miners who already own bitcoins but they need it to be changed for yuan to pay the electricity bill, which was generated while mining the virtual asset. 

Thomas Heller, the chief business officer of Compass Mining, has recently shared his views on the crypto-ban imposed by the Chinese Government. He stated that every now and then, the Chinese authorities impose a ban on a digital asset but it did not affect the activity much. They further suggested that converting the mined coins to RMB would not be a much challenging task for the miners.

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