Chinese Stablecoin Purchases Soar with Bitcoin Price
Despite the official ban on cryptocurrency in China, investors have bought large amounts of stablecoins from over-the-counter services (OTC) in the last week, following the rise in crypto prices, as reported on April 7, 2019.
Where There’s a Will…
While countries like Malta that have been very welcoming to the crypto community and have put laws in place to regularize and support the growth of the industry, China has been on the opposite end, with a blanket ban being put on cryptocurrency altogether in the country.
Despite this ban, however, investors have found ways to trade in crypto, mostly by using foreign IP addresses and so on. With the sudden surge in bitcoin price in the last week, there has been an increase in Chinese investors buying crypto, mostly through over-the-counter desks.
This new development was chronicled by cnLedger, a twitter account, in a series of tweets on April 7, 2019.
“1/ Chinese markets reveal strong buys. OTC (Over-The-Counter) trades, the almost only way to buy bitcoin with fiat in China, showing considerable $ premium (1 USDT = 7 CNY) over the official rate of 1 USD = 6.7 CNY,” one tweet says.
Skirting the Law
Tweets by the account went on to detail just how the trades were taking place despite the ban in place.
The most common way that this has been done is through the purchase of stablecoins such as Tether (USDT) and then trading them for other cryptocurrencies. The data used in the explanation was taken from the trading sheets of exchanges such as OKEx and Huobi.
Figures indicate that there has been a significant increase in the use of OTC services in the last week in CNY terms.
It is likely that Chinese investors have been looking to get in on some of the crypto action as the price of bitcoin has started rising, breaking a months-long spell of stagnancy.
Another Twitter account, LightCrypto, pointed out this recent activity is reminiscent of a time when Chinese crypto trading dominated the market.
“We are witnessing a resurgence in Chinese demand for cryptocurrencies. This trend in the making comes after more than a year of relative quiet, a reminder of the time when Chinese volumes were king” the tweet said.
With this, one can only imagine what trading volumes would look like globally if the Chinese ban on crypto was eventually lifted.