Get yourself a crypto tee or surprise a crypto enthusiast in your life with our festive Coin Bureau Merch!
Bitcoin Trading in China
4 min read

The Future of Bitcoin Trading in China: Regulatory Workarounds and Rumors

By Editorial Team

Two months ago, the crypto world was rocked by the Chinese government’s announcement that they’d be banning crypto exchanges indefinitely in China.

This bombshell sent shockwaves through the space, both regarding sentiments and price. Fear, uncertainty, and despair took over the market, and the withdrawal of Chinese investors—hitherto the #1 by volume—caused the price of Bitcoin to acutely sink.

The space in general has stabilized then, with a flood of new Japanese investors filling in the international void left by China’s exchange ban.

But what about the Bitcoin trading situation inside China right now?

Today we’ll be walking you through some of the regulatory workarounds domestic Chinese Bitcoin traders are currently resorting to, as well as the rumors that the Chinese Communist Party (CCP) could be bringing back regulated exchanges in short-order.

Let’s begin.

Chinese traders react

Three general trends materialized in the wake of the CCP’s exchange ban:

  • Dozens of Chinese blockchain start-ups began shifting to Hong Kong
  • Chinese traders began shifting from domestic exchanges to P2P and OTC markets
  • Chinese crypto users began shifting from WeChat to more private services like Telegram

And these trends, of course, are being done with a mind to skirt the Chinese government’s now ongoing exchange ban.

P2P Bitcoin trading grows

In the second week of September when Chinese traders started looking for new trading vectors, international OTC markets like Coincola, Bitcoinworld, and Localbitcoins became natural havens for a surge of refugee volume.

Indeed, in the first three days after China’s exchange ban went live, Localbitcoins.com alone saw volume skyrocket over 50% in the platform’s Chinese sub-market, eclipsing 32 million yuan in just 72 hours.

With these international markets falling outside of the purview of the CCP’s control, Chinese traders have only continued to migrate en masse to these platforms, no longer able to facilitate trades on centralized domestic exchanges like

WeChat, Telegram trading groups sprout up

WeChat Bitcoin Trading ChinaWeChat is China’s most popular social network, but it—like most Chinese companies—lies perpetually at the mercy of Chinese regulators.

So, too, then does its users chat logs and account details.

That’s why Chinese crypto traders have also been migrating en masse from WeChat to the streamlined and privacy-minded Telegram chat app. Slack is another Western app Chinese users have been flooding too in the wake of the exchange ban.

These traders want to be able to strategize and facilitate trades without the Chinese authorities breathing down their necks, and Telegram, Slack, and similar apps make these endeavors more possible for them.

Ex-Chinese exchanges go international, launch P2P services

Dominant Chinese crypto exchange Huobi is doing its part to skirt the new regulations by activating Huobi Pro, the company’s new P2P trading system. This system will allow Chinese traders to still deal in Bitcoins without running afoul of Chinese law—at least as it stands now.

And Okcoin moved overseas to create Okex, a P2P platform just like Huobi Pro.

In moving abroad, Chinese companies like Okex are doing what it takes to move beyond the Chinese government’s regulatory reach while still aiming to service Chinese crypto customers.

Rumors that regulated trading is coming back

The CCP just held its 19th National Congress, and with the legislative reshuffling has also come rumors that a more lenient stance toward cryptocurrencies could be forthcoming from the Chinese government.

In the mix with this purported newfound leniency comes the announcement of a new domestic Chinese exchange, ZB.com. They declared they’d go live on Nov. 1st, but as yet their site hasn’t materialized. Have they been spooked by the regulatory situation themselves?

In the meantime, what is clear is that Chinese users will continue offline and P2P trading to circumvent the current lack of online Bitcoin exchanges in the nation.

Indeed, no amount of regulation can stop this grassroots trading—China’s just created new markets by closing old ones.

Images via Fotolia

Editors at large. Posting the latest news, reviews and analysis to hit the blockchain.
View all posts by Editorial Team -> Best Crypto Deals ->

Related Posts

crypto gifts
Top 10 Best Crypto Gifts in 2022
crypto gifts

Top 10 Best Crypto Gifts in 2022

December 2nd, 2022 25 min read
Can you still make money mining Bitcoin
Can you Still Make Money Mining Bitcoin in 2022?
Can you still make money mining Bitcoin

Can you Still Make Money Mining Bitcoin in 2022?

May 20, 2022 22 min read
Bitcoin as World Reserve Currency - Possible
Bitcoin World Reserve Currency- Possible, or Probable?
Bitcoin as World Reserve Currency - Possible

Bitcoin World Reserve Currency- Possible, or Probable?

November 11th, 2022 43 min read
Big Time Review
Big Time Studios: The Best AAA Blockchain Game?
Big Time Review

Big Time Studios: The Best AAA Blockchain Game?

April 4, 2022 12 min read
Rubic Exchange Review
Rubic (RBC): DeFi For The Masses!
Rubic Exchange Review

Rubic (RBC): DeFi For The Masses!

April 1, 2022 10 min read
State of Crypto Tax Reporting
The State of Cryptocurrency Tax Reporting in 2022: Report
State of Crypto Tax Reporting

The State of Cryptocurrency Tax Reporting in 2022: Report

August 13th, 2022 21 min read
Trustwallet Review
Trust Wallet Review: Complete Wallet Overview
Trustwallet Review

Trust Wallet Review: Complete Wallet Overview

March 8, 2022 16 min read