The Way Bitcoin Buyers Are Getting Around Chinese Government Ban

China’s residents are nonetheless making an investment in Bitcoin and the digital currency marketplace in spite of the authorities’ heavy crackdown. In September, China’s digital currency exchanges BTCC China, Huobi and OKCoin were ordered by the authorities to close down their industries. At one point, executives of the 3 digital currency exchanges were averted from leaving the China, because of a government research into Chinese digital currency exchanges.

In December, China’s 3 biggest digital currency exchanges relocated their organizations to Hong Kong. BTCC China, Huobi and OKCoin rebranded to BTCC, Huobi Pro and OKEx, respectively. They supposed to deal with the swiftly developing demand from Hong Kong-based traders. Quickly after their move, the three main Chinese bitcoin and other digital currencies buying and selling platforms began to see, each day volumes from China’s traders increase exponentially. However, China’s traders were managing to avoid Chinese buying and selling regulations by the usage of Hong Kong-based exchanges.


In Hong Kong, it is incredibly easy for traders to set up organizations. With much less than one thousand dollars, organizations may be legally created, which permits the opening of commercial enterprise financial institution accounts at Hong Kong-based Banks. Starting in December, many China’s buyers moved their finances from their Chinese bank accounts to Hong Kong bank accounts and began to exchange digital currencies more actively, successfully bypassing China’s regulations.

However, unlike China, Hong Kong has a decrease supply to satisfy the developing demand. Even as China is home to main miners like Bitmain, Hong Kong does not produce much Bitcoin and different digital currencies. As such, rates within the Hong Kong digital currency marketplace accelerated, surpassing even that of the South Korean marketplace. On January 18, while the worldwide average rate of Bitcoin was nearly $11500, Bitcoin was being traded at above thirteen thousand dollars on Huobi Pro.

Krystal Hu, a Hong Kong-based finance journalist, cited that investors outside of China have additionally began to take benefit of the arbitrage possibility offered by the Hong Kong marketplace. As an example, on January 18, the price of Bitcoin on Coinbase was $11800. Buying Bitcoin from Coinbase and promoting it on any Hong Kong-based marketplace would have generated $1200 in earnings.


Hong Kong’s exchanges have additionally included extensively used financial technology programs in China including Alipay and Tencent’s WeChat Pay. Alipay is a sixty billion dollar financial technology software this is utilized by more than fifty percent of mobile customers. WeChat Pay, which was just used by seven percent of mobile customers in 2014, is now being utilized by more than forty percent of mobile customers in China.

The mixing of the two financial technology payment networks has accelerated the accessibility of Hong Kong-based digital currency over-the-counter exchanges for China’s traders, easing the process of making an investment within the digital currency marketplace. To save you Chinese buyers from shopping for digital currencies, the China’s authorities and the People’s Bank of China have requested local banks to reveal any suspicious transactions related to markets. All in all, even this movement will not be capable of prevent Chinese traders from having access to Hong Kong markets, because of programs including Alipay and WeChat Pay.

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