Chinese citizens still invest in Bitcoin and other cryptocurrencies, despite the strict measures and repression by the government.
In September 2017, the Chinese cryptocurrency exchanges BTCC China, Huobi and OKCoin on the orders of the government were forced to cease their activities in China. During the government investigation the managers of these exchanges weren’t even allowed to leave the country.
Three months later, in December 2017, the world’s three largest cryptocurrency exchanges have moved their business to Hong Kong. BTCC China, Huobi and OKCoin changed its name to the BTCC, Huobi Pro and OKEx, respectively. They had intended to meet the rapidly growing demand from investors from Hong Kong.
Soon after “move” became evident that these three trading platforms daily volumes from Chinese Investors is growing exponentially. Anyway, Chinese investors were able to circumvent government restrictions using exchange in Hong Kong. How this was possible?
To open an account in financial institutions in Hong Kong, investors need to establish their own enterprise. The price of the issue of legal registration is about $ 1000.
Chinese investors did just that and already, starting in December 2017, most of them began to transfer their money to Bank accounts in Hong Kong. This allowed them to actively trade the cryptocurrency, bypassing the ban of the Chinese government.
China is home to major miners such as Bitman, while in Hong Kong Melnitsa not so much bitcoins and other cryptocurrencies. Thus, prices on the Hong Kong cryptocurrency market has increased, surpassing even the South Korean market. 18 January, when the world average Bitcoin was worth about 11 500$ on Huobi Pro it traded at more than $13 000.
Traders outside of China quickly began to use the arbitrage opportunity presented by the Hong Kong market. For example, on 18 January, the price of Bitcoin on Coinbase was $11 800. Buying Bitcoin on Coinbase and selling it on any stock exchange of Hong Kong would yield a profit of $1200.
Hong Kong exchange also integrated is widely used in China FinTech applications such as Alipay and WeChat Pay Tencent’s. Alipay app with a turnover of $ 60 billion, which is used 50% of mobile users. WeChat Pay, which in 2014 was used only 7% of mobile users now use more than 40 % .
The integration of these two FinTech applications eased Chinese investors the process of investing in the cryptocurrency market.
The Chinese government and people’s Bank of China, in order to prevent Chinese investors the opportunity to buy cryptocurrency, called on local banks to disclose any suspicious transactions related to the markets of Hong Kong. However, even this step can not prevent Chinese investors to access markets in Hong Kong, thanks to applications such as Alipay and WeChat Pay.
The post Chinese investors back in the game and buy crypto-currencies, bypassing the government ban appeared first on FineCrypto.
