Bitcoin Exchanges in China
Chinese Bitcoin investors still wield a strong influence on the market despite the 2017 and 2021 crypto ban. This article explores the methods and loopholes traders are utilising to bypass harsh regulatory conditions.
Here’s Our List of Top Bitcoin Exchanges in China
Here are some of the top exchanges in China:
What Should I Look for in the Bitcoin Exchange in China?
With the imposition of tougher regulations on Bitcoin mining and trading, exchanges operating in mainland China had no option but to close. Major exchanges like Binance and Huobi have stopped accepting Chinese users as of late September 2021. This began in 2017 when the Chinese government banned exchanges and ICOs (Initial coin offering).
The Chinese government considers Bitcoin a speculative asset with no real backing. It points to its volatility and the impact on the financial and security stability of the country. The option of using peer-to-peer crypto marketplaces for retail investors remains, popularly known as OTC.
Below are the main factors to consider for crypto buyers in China:
Regulation:
Government laws and regulations have altered the Chinese crypto landscape completely. These are the key regulations. It is illegal for exchanges to facilitate buying and selling digital assets. This also applies to the sale of cryptocurrency from overseas exchanges. Financial institutions are barred from facilitating crypto activities that include funds transfer and account opening. There is a ban on the provision of payment or advertisement services for cryptocurrency. China was known as one of the largest Bitcoin mining countries in the world. Some of the major crypto exchanges had their headquarters in mainland China. With the current ban aimed at stemming crypto mining and trading, only the use of P2P platforms makes it possible to circumvent these laws.
Fees:
P2P platforms levy charges including escrow, transaction, and payment processing fees. Investors avoid deposit and withdrawal fees associated with centralised exchanges.
Geo-restrictions:
Centralised exchanges have been banned from China. The government prohibits its citizens from using these platforms to conduct crypto trades. Global P2P marketplaces like Paxful are available because the regulations do not clearly outlaw them.
Payment Options:
P2P marketplaces provide various payment options, including WechatPay, AliPay, and bank transfers. Buyers are likely to prefer these methods because they are readily acceptable to individuals in China.
How to Get Started With Bitcoin Exchange in China
Since P2P marketplaces are the prominent option for Bitcoin purchase in China, we look at the steps to open an account and make a purchase.
Step 1: Open an account
Step 2: Browse the advertisements on the platform
Step 3: Initiate the exchange
Step 4: Execute the trade
Step 5: Storage
What Options Do I Have to Buy and Sell Bitcoin in China?
With the current ban on mining and trading cryptocurrency in China, all exchanges have ceased their operation in the country. The first ban came in 2017 when exchanges like OKEx suspended their trading platforms, and the apps were no longer downloadable.
Buyers in China are still using various means to bypass the existing laws.
Use (Virtual Private Networks) VPN Services:
VPN services are also banned and blocked in China. However, as with the case with private networks, it is impossible to block all of them. e.g., NordVPN. This software help mask the IP address of your device (computer, tablet, or smartphone). This makes it cumbersome to monitor the online activity of a device. Although illegal, investors can open accounts and fund accounts overseas. Exchanges like Binance are a good option due to the less strict KYC requirements on smaller purchases.
Use of Intermediaries:
Vendors of online e-commerce apps such as Taobao help Bitcoin investors establish legal entities offshore. Regions and territories like Marshal Islands, the UK, and the British Virgin Islands are favoured due to their friendly laws. These registered entities assist investors to make Bitcoin purchases.
Do I Have to Pay Tax When Selling Bitcoin for Profit in China?
There is a blanket ban on crypto activities in China. Cryptocurrency trading is deemed illegal, but there are no tax regulations.
Conclusion
China is one of the prominent countries that has banned Bitcoin trading. Given the significant crypto market and mining activities in the country, it was only natural for investors to seek alternatives, including the use of intermediaries.
FAQs
What is an exchange?
Can I buy and sell Bitcoin with ID on exchange?
Are exchanges legal in China?
What is the difference between an exchange and a broker?
