Topic: Do The Chinese Use Bitcoin To Get Pass Its Foreign Exchange Control? (Read 266 times)
December 18, 2019, 02:05:27 PM
Is Chinese money still going to Hong Kong or have been moving towards Singapore?
December 18, 2019, 05:08:51 AM
If this will be the case then China would have a huge chance of regulating bitcoin and cryptocurrency in their country. But as far as we know, they couldn't possibly do such act like that because of how independent bitcoin is. If people will keep on doing such act to escape their responsibilities as a citizen I don't think they are utilizing bitcoin in such a productive way it should be. But I do really admire people who are using bitcoin as their main currency when they badly need it (protesters), but I will consider admiring more if they trust their government.
I agree, I have a simple structure looking at this
Good government | Bad government
—————————————————-————————
For | |
—————————————————————————
Against | |
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For good government one can help with catching illegal behaviors, against government include money laundry so on and forth
Against bad government is helping Venezuela escape its hyperinflation, we can put intentions in places we see fit.
The tricky part is how is good and bad decided?
December 17, 2019, 09:07:21 AM
If this will be the case then China would have a huge chance of regulating bitcoin and cryptocurrency in their country. But as far as we know, they couldn't possibly do such act like that because of how independent bitcoin is. If people will keep on doing such act to escape their responsibilities as a citizen I don't think they are utilizing bitcoin in such a productive way it should be. But I do really admire people who are using bitcoin as their main currency when they badly need it (protesters), but I will consider admiring more if they trust their government.
December 17, 2019, 05:45:45 AM
Of course, they do. Just as all the people who live in a country with stringent currency controls.
I would do it too, under those conditions.
I would do it too, under those conditions.
Yes. If the Chinese were not using bitcoin to get their money out, the Chinese government would not have closed down all the bitcoin exchanges back in 2017. You only do something drastic like that if you perceive a grave threat.
December 16, 2019, 09:49:11 PM
I got quite confused at first, since at first glance, it looks like what you're asking is that if Chinese people use Bitcoin (which I generalized to cryptocurrency, because I didn't know that it was the main point), to get pass its Foreign Exchange Control.
Then came the short answer: no. In which upon reading, all this time I think that what you want to convey is that people aren't using whatever it is to get past FEC, instead for other things. Just in the later part I realized that what you meant is that they don't use Bitcoin specifically, but rather other cryptocurrency/ies aside from Bitcoin.
Nevertheless, a good read. I just don't think it's necessary to have this long read just to state that they're not using Bitcoin, and instead uses other crytocurrencies, with mostly USDT.
Then came the short answer: no. In which upon reading, all this time I think that what you want to convey is that people aren't using whatever it is to get past FEC, instead for other things. Just in the later part I realized that what you meant is that they don't use Bitcoin specifically, but rather other cryptocurrency/ies aside from Bitcoin.
Nevertheless, a good read. I just don't think it's necessary to have this long read just to state that they're not using Bitcoin, and instead uses other crytocurrencies, with mostly USDT.
December 16, 2019, 08:47:47 PM
Some must do it for sure. But I'm wondering how easy that would be for large amounts of money. As we know, China has tough controls on payments. Most happen electronically through government approved applications. If somebody was dealing too much with cash, it'd might be expensive and also suspicious. Maybe getting money out of china is either a small time thing or mostly accessible to those with access to elite grey market services.
Yea it is mostly accessible only to the elite class, as far as I understand they only get their hands on this service through introductions, the transfer isn’t as limited due to it a company transfer mostly
December 12, 2019, 09:39:08 PM
This is how gambling platforms in China move money as well
December 12, 2019, 08:32:01 PM
Capital Control has always been a contentious issue, with most people saying it is their wealth and asking why they should get permission from a government to transfer any amount of money out of the country. Bitcoin is not controlled by a country and it is borderless, so you can transfer any amount to anyone as often as you like. This is just one more reason why people should use bitcoins and not government controlled fiat currencies.
What is going to happen when you want to leave your country, do you need permission in your country to take your wealth with you.
What is going to happen when you want to leave your country, do you need permission in your country to take your wealth with you.
Well this is one good reason to use Bitcoin. Tether is dangerous, but people don't understand that. Some are too lazy for converting things on the fly, those lazy people who have never lived hyperinflation. For starters Tether practices fractional reserve, its a bomb waiting to happen. And its "pegged" to a fiat, that is already unsafe by itself. They also use various blockchains, but not theirs. And they create tokens on a whim. If people think Tether is Bitcoin without the fluctuation, they are going to be getting a nasty surprise someday.
Any coin that claims to be backed in "anything" is a bomb waiting to explode, you will lose your money. Your only "hope" is it doesn't implode the day you are transacting with it. Those that manage it have already shown irregularities in the past...
December 12, 2019, 05:49:52 PM
But in China, Tether is actually used in 99% of Bitcoin spot trades, according to Chainalysis.
I know this is true however you need the fiat x tether pair in the other Fiat currency as well, otherwise you cannot do the remittance.
This makes things not so easy.
Why do you assume that makes things difficult? That's actually what the OP was talking about, how there are robust OTC Tether/fiat markets emerging.
We are used to focusing on Tether's banking problems, but that only pertains to the primary Tether market -- the actual redemption of USDT directly by Tether.
Chinese (and Russian) liquidity is being built on secondary markets. It's based around OTC liquidity providers that don't need to mandate Tether's KYC requirements and who don't require constant USDT issuance/redemption. The vast majority of this economic activity requires no banking at all. Brokers are buying and selling USDT for cash at high volumes.
Volatility is irrelevant here, as a bitcoin transaction can be done in less than 30minutes. In 30minutes btc volatility is basically zero as exchange fees plays a bigger role.
Volatility is not irrelevant at all. We're not talking about exchanges either. The Chinese don't have access to liquid, centralized exchanges with banking.
We're talking about high volume OTC transactions in cash, and moving value across borders. If a Chinese importer in Moscow buys bitcoins from a Moscow OTC broker, he can't immediately liquidate those bitcoins for cash on the other side of the border. In the meantime, the price of Bitcoin could drop 10% a day. Why take that risk?
That's what Chinese Tether users seem to be asking themselves.
December 12, 2019, 05:04:27 AM
But in China, Tether is actually used in 99% of Bitcoin spot trades, according to Chainalysis.
I know this is true however you need the fiat x tether pair in the other Fiat currency as well, otherwise you cannot do the remittance.
This makes things not so easy. Maybe even avoid the biggest exchanges which may have more strict kyc and countries restrictions.
It can be done with tether but I believe it is less convenient in most cases. U less you have two exchanges with 2 fiat pairs against tether.
The volatility in bitcoin makes it unsuitable as a means of conversion, especially one that will not be completed instantly but will go through so many processes.
It would also create a hassle as to how much it was when every transaction was made during the conversion especially when it's being done through, private over the counter trades.
Stable currencies are the most suitable solution in this case and is one of the reasons why it has become so popular in countries like China.
Volatility is irrelevant here, as a bitcoin transaction can be done in less than 30minutes. In 30minutes btc volatility is basically zero as exchange fees plays a bigger role. It would also create a hassle as to how much it was when every transaction was made during the conversion especially when it's being done through, private over the counter trades.
Stable currencies are the most suitable solution in this case and is one of the reasons why it has become so popular in countries like China.
December 12, 2019, 02:39:29 AM
Some must do it for sure. But I'm wondering how easy that would be for large amounts of money. As we know, China has tough controls on payments. Most happen electronically through government approved applications. If somebody was dealing too much with cash, it'd might be expensive and also suspicious. Maybe getting money out of china is either a small time thing or mostly accessible to those with access to elite grey market services.
December 12, 2019, 02:27:18 AM
Capital Control has always been a contentious issue, with most people saying it is their wealth and asking why they should get permission from a
government to transfer any amount of money out of the country. Bitcoin is not controlled by a country and it is borderless, so you can transfer any
amount to anyone as often as you like. This is just one more reason why people should use bitcoins and not government controlled fiat currencies.
What is going to happen when you want to leave your country, do you need permission in your country to take your wealth with you.
Example : https://www.forbes.com/sites/richardgrant/2013/08/25/it-cost-mark-shuttleworth-more-to-leave-south-africa-than-it-did-to-leave-the-earth/#15c2739a76c9
government to transfer any amount of money out of the country. Bitcoin is not controlled by a country and it is borderless, so you can transfer any
amount to anyone as often as you like. This is just one more reason why people should use bitcoins and not government controlled fiat currencies.
What is going to happen when you want to leave your country, do you need permission in your country to take your wealth with you.
Example : https://www.forbes.com/sites/richardgrant/2013/08/25/it-cost-mark-shuttleworth-more-to-leave-south-africa-than-it-did-to-leave-the-earth/#15c2739a76c9
December 12, 2019, 02:00:59 AM
Users always term volatility as a feature that restricts in such conversion process. If the core value is understood they'll never attribute volatility anymore. Not only Chinese, even other country people does it when they're kept under control to use their own money. Some stated stablecoin a solution, this is purely for people who want to stay away from risk.
December 12, 2019, 01:49:56 AM
I believe bitcoin can be sometimes easier than tether.
There are much more local fiat pairs against bitcoin than tether...
The volatility in bitcoin makes it unsuitable as a means of conversion, especially one that will not be completed instantly but will go through so many processes.There are much more local fiat pairs against bitcoin than tether...
It would also create a hassle as to how much it was when every transaction was made during the conversion especially when it's being done through, private over the counter trades.
Stable currencies are the most suitable solution in this case and is one of the reasons why it has become so popular in countries like China.
December 12, 2019, 01:19:53 AM
I'm sure it's used on a small scale, but it sounds like volatility is a major deterrent for those looking to move capital offshore. The real winner here appears to be Tether. Since Tether leverages blockchains to cut off government tracking and third party meddling but also retains price stability, the Chinese are taking to it.
I believe bitcoin can be sometimes easier than tether.
There are much more local fiat pairs against bitcoin than tether.
But in China, Tether is actually used in 99% of Bitcoin spot trades, according to Chainalysis.
Tether isn't just a base pair for cryptocurrency markets anymore, either. Like the OP points out, it's becoming a robust remittance vehicle and is becoming the preferred option over Bitcoin for that:
Nowadays tether is more common than a few years ago, however bitcoin is still the most common cryptocurrency and the easier one to exchange back to fiat.
In China, I believe it's very easy to exchange either Bitcoin or Tether to fiat. For remittance, the market is showing a preference for Tether, though. That has obvious implications for capital flight.
December 12, 2019, 01:06:06 AM
I think it's a common scenario in China. Since a lot of Chinese people are doing in this blockchain system so they are doing something like this without any doubt. another important thing is that China is trying to take the lead all the aspect of the current situation, so they are working on a various perspective, Not only that but also China has taken a step regarding the blockchain system, though China is really in a hard position against Bitcoin and Cryptocurrency, but a lot of people from China are working for the flourishment of this system, so who knows what will happen in the coming days.
December 11, 2019, 11:20:49 PM
i'm beginning to see why the tether market is booming in china. the crypto markets have provided USDT with enough liquidity to attract chinese interest as a capital flight mechanism. and apparently also as a means for tax evasion and money laundering too in the case of these private OTC brokers.
that is just the tip of the iceberg of reasons that has led to Tether becoming this big. people keep asking why they keep printing more USDT but they miss all these people who have no other option but to use USDT!
that's not all, basically anyone else in any other country who wants to avoid KYC and the shenanigans of the banks while transferring fiat between cryptocurrency exchanges, is going to pretty much have to use USDT. not to mention that exchanges themselves don't want to add fiat because of all the bank related headaches (eg. banks closing down Bitfinex's accounts a couple of years ago before they went full Tether) are adopting Tether.
December 11, 2019, 07:20:50 PM
Although I am not really a big fan of China but there is no question that things are happening in there according to the design and overall vision of the government. In other words, they wanted to have their own cakes and have the chance to eat them too. The government has been working day and night for economic progress to raise as many people out of poverty as fast as they can, but they wanted to have controls on everything they can think of. And for now, people are not complaining that much. Financial control is always on the table and yes the government will be using all the tools they can including the blockchain and cryptocurrency. In extension, the government has an adamant disdain on Bitcoin and cryptocurrency that is beyond their own control. This is China and it is doing things with a lot of sense, and we may not like them but that the reality is that China is following what can be on its best interest.
December 11, 2019, 07:14:43 PM
I'm sure it's used on a small scale, but it sounds like volatility is a major deterrent for those looking to move capital offshore. The real winner here appears to be Tether. Since Tether leverages blockchains to cut off government tracking and third party meddling but also retains price stability, the Chinese are taking to it.
I believe bitcoin can be sometimes easier than tether.
There are much more local fiat pairs against bitcoin than tether.
Nowadays tether is more common than a few years ago, however bitcoin is still the most common cryptocurrency and the easier one to exchange back to fiat.
December 11, 2019, 07:00:00 PM
all of this must be attracting the ire of the chinese government. i hope bitfinex and tether are well insulated from their reach.
Not so much.. Bitfinex is in Hong Kong..
And are you aware of what is happening in HK right now because of China?
Search for "Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation Bill 2019"..
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