Cryptocurrency News, How the Chinese get around the Cryptocurrency Bans

Today in the crypto news, I saw an interesting article that detailed how people in China are affected by the cryptocurrency bans that the government has imposed on the people. From the outside it seems as though the country has completely banned all trading and made it impossible to trade cryptocurrencies. However, the people of China have found alternative ways to still get in the action and purchase and trade cryptos.

As we know Chinese officials banned all cryptocurrency exchanges inside the country like Binance and OKCoin. Since the ban, those exchanges have moved into other Asian countries like Japan and South Korea and set up shop there. However, the Chinese government left a loophole which some businesses took advantage of which was, that China hadn't outlawed cryptocurrencies itself, but banned the exchanges themselves. Huobi and OKEx are examples of some of these sites that got rid of the transaction fees and changed their format so that they could avoid the exchange title. For the Chinese buyers, they now go through peer to peer transfers and use smaller pop up sites where they can find buyers willing to sell cryptos. The sites they use are a lot like Ebay but for cryptocurrency where you find the coin you are wanting to buy and then you can look through the list of sellers and choose them based off their price and how much they are willing to sell. However, going around the system like this has its own draw backs as they charge a hefty premium sometimes reaching as high as 20 to 30% higher than the actual price is. One of the examples given was that on January 18th when Bitcoin was being traded for $11,730 it was being sold on those platforms for $13,085.

Since cryptocurrencies are decentralized and once you purchase them completely anonomous this gives people the freedom to purchase through these sites an still hide their investments or money from the government. There is no way to completely ban trading cryptos because there is no way to track them as well as you will never be able to stop the peer to peer trading that the cryptos allow for transactions.

Because of these reasons we can see how difficult it will be to get rid of cryptocurrencies if not impossible as it is taking all the power of the financial world away from governments and big banks. If China cannot stop trading within their own country it doesn’t bode well for any other nation that plans to ban trading within their own country.