A lot of citizens of China have moved more than $50 billion in crypto out of the country in the past year to avoid foreign the currency rules according to a report that we are looking into in our crypto news today.
The citizens of China moved more than $50 billion of crypto, breaching the capital limits as the government only allows citizens to buy a maximum of $50,000 in foreign currency. The report by Chanalysis said that Tether was mainly used to move the money out. The users breach capital flight limits as the relations between US and China hit new lows.
According to a report by Chainalysis, the Chinese citizens have been breaching the rules as the government only allows them to move about $50,000 or less out of the country every year. Chainalysis added that the wealthy citizens gotten around this far with foreign investments in real estates and other assets by covering their investments through shell companies:
“Cryptocurrency could be picking up some of the slack though. Over the last twelve months, with China’s economy suffering due to trade wars and devaluation of the yuan at different points, we’ve seen over $50 billion worth of cryptocurrency move from China-based addresses to overseas addresses.”
The report noted that Tether is mainly being used to move the money out of the country as stablecoins and cryptocurrencies want to reduce volatility. Tether is believed to be pegged to the US dollar and it surged in popularity among the traders in the past few years. Most of the popularity from the Chinese government crackdown on exchanges for the yuan, caused it to become the main fiat model used for Chinese crypto users:
“In total, over $18 billion worth of Tether has moved from East Asia addresses to those based in other regions over the last 12 months. Again, it’s highly unlikely that all of this is capital flight.”
Chainalysis said that the increase in Tether movements could have been boosted by the speech of the Chinese President Xi Jinping when he said that the country could launch its own cryptocurrency. this contributed to the perceptions that there are limited opportunities for private ownership. The second spike came around March when most of the Western economies decided to go on a lockdown due to the ongoing coronavirus pandemic.
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