China’s relationship with digital currencies has been theatrical. The two had a very long history as China was one of the two countries to facilitate the use case of technologies present in cryptocurrency. But China’s past decisions regarding this market have impacted the entire stream by an exceeding extent.
China accounted as a cryptocurrency hotspot as many trading exchanges and mining plants emerged from this country only. But subsequently clamping local cryptocurrency exchange and trading in these virtual coins, China is willing to execute similar operations for international trading in digital currencies.
As per the recent reports, the government will implement strict measures to eliminate international foreign exchange and initial coin foreign exchange utility. However, you can go through authentic platforms like the official website to get a complete guide of cryptocurrency trading. In short, China will ban digital currency trading at the offshore exchange. Here are some details of China banning international cryptocurrency trading.
China’s cryptocurrency crackdown
Last year, China made a big move to improve its financial stability as it prohibited cryptocurrency exchange from executing operations in the nation. Later it was seen the neighboring countries of China acquired a lot of foreign customer base, and the majority of the traffic came from China. However, even after banning digital currencies in the biggest hotspot of cryptocurrencies globally, there was no significant impact on the marketplace.
After the ban, citizens blazed the trading trail on newfangled digital currency exchange by using loopholes. Most citizens installed a virtual private network application in their mobile phones to access the foreign exchange.
Still, citizens of China have a user account on exchange based in Hong Kong and Japan. Usually, Chinese traders prefer Japanese cryptocurrency exchanges as they are very secure. All the more, citizens of China used the utmost famous Hong Kong-based international exchange, binance. Subsequently, the ban, binance saw a massive surge in their customer base, and all of them were from China.
How can citizens of China trade be using foreign exchange despite the ban?
Regardless of a ban on digital currencies, citizens can trade in cryptocurrencies. As discussed above, the only way to surpass government restrictions to trade in cryptocurrencies is through VPNs. Almost every trader uses a VPN to execute their operations regarding digital currency trading. The virtual private network connects the internet connection of your mobile phone or computer with a line of other countries. You can use the server of any country using a VPN as it creates a virtual portal for the users.
Is there any definite figure for traders in China?
Almost everyone, even people devoid of the conventional banking system, leaned towards digital currencies. China was an early adopter of this technology, and many merchants were accepting cryptocurrency as an exchange method.
But the Chinese government was concerned that if bitcoin manages to outplace the traditional banknotes in the country, its economy will be precarious. Currently, no report has clarified the definite number of cryptocurrency traders in China.
Will other countries do the same with cryptocurrencies?
Other highly active countries in cryptocurrency trading are Korea, Japan, the United States and Canada. But Chinese citizens are only attracted to their neighboring country to perform cryptocurrency trading. South Korea and Japan are considering imposing some strict cryptocurrency regulations. Cryptocurrency trading in South Korea has acquired an exceeding extent of the tract. The fiat currency of this nation is one of the most used currencies in digital currency trading.
The leading fiat currency in terms of digital currency trading is USD. Many cryptocurrency exchanges emerged from the United States, and when there was no local exchange, people from different countries used to trade using US-based exchange. And later, after the arrival of many local exchanges, US-based exchanges managed to retain their customer base.
USD is classified as a second gold standard as, in contrast to other fiat currencies, USD is highly stable, deflationary, and its value in the international market is very high. Therefore, undeniably the ban affected the market price of many coins, but even after the crackdown, the trading volume was insignificantly affected. In short, citizens of China who were active in cryptocurrency trading never stopped trading.
It is all you should know about China and the cryptocurrency trading ban.