The government crackdown on cryptocurrency trading is how China decided to regulate the entire market this year. However, according to a new report by South China Morning Post (SCMP), it seems like this decision by the government did not affect many Chinese traders.
As the report notes, the Chinese traders are still active in trading, using virtual private networks (VPNs) and the dollar-pegged stablecoin Tether (USDT) as a major tool to circumvent the ban.
Combined with virtual private networks (VPNs), traders have begun leveraging the stablecoin Tether as a means of entering and exiting the cryptocurrency markets. They can use an exchange platform notionally with a virtual private network (VPN) as the intermediary that lets them swap cryptocurrency for fiat currency and vice versa.
As the publication reported:
“[T]wo individuals who have both completed a ‘know-your-customer’ procedure with an exchange would swap ‘fiat’ currencies […] to Tether. The exchange plays the role of an overseer of such trades, and stands ready to adjudicate in cases of failed trades, or transactions that are not honoured.”
Meanwhile, the general ban on cryptocurrency exchanges has been stepped up by a Beijing district last month, which aimed at banning over 120 websites or platforms that attempt to serve would-be domestic consumers on a local level.
Right now, there is no successful scheme that would block VPNs, which still gives room to traders to maintain their access to forbidden online resources.
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