Chinese Crypto Users Turn to In-Person Trades To Evade Crackdown
Cryptocurrency users in China have adapted to under-the-radar in-person trades and encrypted messaging to keep digital asset dealing alive amid the country’s broad industry crackdown, reports the Wall Street Journal.
Sources told the WSJ that Chinese crypto traders shifted trading to everyday venues like cafes and laundromats to discreetly swap wallet addresses and cash after exchanges blocked local users. Social apps like WeChat and Telegram also host dedicated crypto trade groups, connecting buyers with sellers directly.
- China declared all crypto activities illegal in 2021, but it still saw nearly $86.4 billion in P2P crypto volume last year, per Chainalysis.
- Traders favor in-person trades in inland cities where lax local official oversight makes detection less likely.
- Continued crypto flows despite authoritarian policies may portend limits to enforceability elsewhere.
Read more: Crypto Crime Drops In 2023 To $24.2 Billion: Chainalysis
Chinese crypto traders go stealth mode
The People’s Bank of China instituted the crypto prohibition in September 2021, causing exchanges like Binance to immediately bar Chinese residents from their platforms. However, demand persists through creative means beneath the authorities’ radar.
According to Chainalysis, China witnessed over $86.4 billion in P2P crypto transfers last year, demonstrating the resilience of decentralized networks even under uncompromising national bans.
If Chinese citizens find ways to sustain crypto activity despite blanket authoritarian restrictions, more liberal jurisdictions may face comparably stubborn limitations on deterring use, for better or worse.
Read more: Tether Makes $380,000,000 Bitcoin Purchase, Holds 66,465 BTC
As global consensus on whether and how to regulate cryptocurrencies remains lacking, China offers a case study on the practical boundaries of imposing outright decrees against borderless technologies.
Different countries have adopted various approaches to cryptocurrencies. While countries like El Salvador have adopted digital assets, countries like China have outright banned cryptocurrencies in their countries.
