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| Crypto Facilitates Limited Money Transfers to China, |
Crypto Facilitates Limited Money Transfers to China
Crypto is not illegal in China, but it is illegal for banks and financial institutions to deal with crypto. It is also illegal for citizens to send more than $ 50,000 fiat money in one day, without government permission. Banking regulations that limit international trade, and state surveillance amid political unrest mean that transferring money may be difficult. Although bitcoin's legal position is rather precarious, China is still finding ways to prepare for non-violent exchanges, free markets are using the crypto channel to prosper even in the face of economic oppression.
Crypto situation in China
Since a series of government bans in 2017, there has been much debate and misunderstanding about the true nature of crypto regulations in China. Long and short is that crypto is not illegal, but is also seen as property under Chinese law. ICO, crypto exchanges and non-OTC brokerage services involving cryptocurrency are all illegal. Basically, any transaction that directly connects government fiat such as yuan, and cryptocurrency, is prohibited. Banks may not deal with bitcoin, and exchanges cannot facilitate their purchases or sales. As for mining, a proposal to ban the activity was made in April, but a crackdown on this area has not been taken.
Despite all this, the legal gray area of OTC trading is still alive and well, largely facilitated through offshore exchanges, VPNs and stable transactions such as Tether's USDT. Some large exchanges that have been moved, such as Huobi, continue to allow trading by functioning as an OTC front, with messaging and payment applications such as Wechat being used to facilitate settlement after traders are connected through the Huobi platform. As China continues to crack down on safe and decentralized digital assets, the country is also preparing to launch its own centralized asset, a kind of digital yuan, soon.
Other Financial Limits
Not only are crypto transactions highly regulated in the economic center, Communist countries, but also fiat transactions. Chinese citizens are prohibited from making international transfers of more than $ 50,000 per day without special permission. Some have found a way out by only making a number of small transfers with several different parties helping in the process. Unofficial brokerage firms also use this method. Expatriates living in China do not have such a limit on the amount of money technically but must prove that their income is legal before making a transfer, which can be a complicated and sometimes impossible task. According to Josh Summers at travelchinacheaper.com:
For those who want to transfer money from China, there are some regulatory hurdles that you must overcome ... Even if you have paid all the necessary taxes, it is normal for people to experience obstacles in the bank.
Overcoming Transfer and Regulation Limits With Crypto
A sea of murky regulations and potentially jail sentences is still not enough to deter crypto users and supporters of economic freedom. Bitcoin is too comfortable where the nation-state is slow and incompetent. Foreign exchange can still be accessed using a VPN, and although the Chinese government is also cracking down on it, use continues. In fact, the use of VPN must be allowed for large companies to do business in China's limited "Great Firewall" cyber atmosphere. Even the iron-headed People's Bank of China (PBOC) knows this, and it won't starve the economy. with such deviations. According to one local source:
Whether it's legal or illegal to use VPNs in China is a very gray area, and the government is deliberately making it so ... many businesses in China need VPN.
Chinese residents can also use VPN to access peer-to-peer OTC trading sites, such as Local.Bitcoin.com and exercise economic autonomy freely, buying and selling BCH and fiat currencies through various diverse payment channels. Trading volumes on sites like localbitcoins.com have remained stable as well, proving that despite government restrictions, crypto, like nature, will find a way out.
Tether pipe
Stablecoin Tether (USDT), with a market capitalization that has recently exceeded $ 4 billion, is the dominant crypto tool used today by major Chinese traders. Tether Holdings has also launched a Chinese yuan stable coin called CNHT. While some people questioned the wisdom in competing with the Communist giants in the field of currency issuance, others supported the effort, thanks to the relative liquidity and stability afforded by the stability of the USDT. Of course, others are more worried that grouping anything into the USD world reserve tank, which has been devalued for more than a century, is not a good idea.
Even so, the USDT is still a superhighway at this time to get around the limiting government regulations. Crypto Coin Metrics network data provider reported that in July USDT contributed 40% and 80% of transactions in Binance and Huobi respectively, according to the report. If the dollar finally dies in the face of expanding negative interest rate policies worldwide, and irresponsible fiscal policies, it will become a truly free market, a decentralized option that remains.
Tech Brings Free Market Solutions
For those who call the vast country of China home, and who values its diverse beauty and culture outside of rotten government interference, leaving the country to pursue financial freedom may not be the desired choice. Fortunately, technological innovation has made many old and obsolete financial practices obsolete. Utilizing tools such as VPNs, chat applications, legal gray areas, and crypto transfer protocols that emerged, even as the government continued to restrict freedom, crypto finance expanded and provided users with natural solutions. Large floods from strong rivers cannot be stopped by ad hoc stick networks or a sign that says "no water."
What do you think about the financial climate in China? Let us know in the comments section below.
Source: https://news.bitcoin.com/crypto-facilitates-money-transfer-for-restricted-china/
