Following their ban on all cryptocurrency, the Chinese government has been imposing severe monitoring policies on the flourishing over-the-counter (OTC) cryptocurrency industry. According to recent reports, over $103 million worth of cryptocurrency was traded in the second half of October alone, which places China as one of the top three OTC cryptocurrency markets in the world.
Following China’s ban on cryptocurrency activity last September, all Bitcoin trading platforms in the country were shut down. In turn, China lost their prominent Bitcoin trading volume. However, this has stimulated all OTC markets significantly.
A Chinese authority, known as the National Committee of Experts on Internet Financial Security Technology, recently released a report regarding the OTC cryptocurrency market in China. The committee was formed in August 2016 by the Ministry of Industry and Information Technology. According to the report, the committee detected several bitcoin transactions which were conducted in CNY via the National Internet Financial Risk Analysis Technology Platform.
The report gives an explanation of the two different kinds of cryptocurrency trading: intraday and OTC. The report states that OTC provides freedom to the user as it requires no fixed location, membership status, or regulatory compliance. Instead, the transactions are conducted on a peer-to-peer basis which is negotiated privately by the involved parties.
Several finance tools have made P2P transactions more convenient, such as Localbitcoins. However, the report noted that users were utilizing apps such as QQ, Wechat, and Telegram in order to negotiate and orchestrate transactions. Once the parties reached an agreement, payment was made using either bank transfers, gift card purchases, or cash remittance.
According to the report, following the strict regulatory policies regarding cryptocurrency that were introduced in September, most P2P and OTC trading platforms were either shut down or ceased to have the support of China-based users. However, OTC exchanges such as Localbitcoin, Paxful, Coincola, and Bitcoinworld, have made it easy for Chinese users to stay in the market while bypassing detection.
The report analyzed data collected from Localbitcoin and Paxful. While the trading volumes remained relatively small, there was a notable increase in turnover since June 2017. The report concludes that the transaction size increased significantly since June. In the last year, OTC Bitcoin trading has spiked up from 5% to 20%. While intraday trading has declined significantly ever since August and nosedived during September.
Following China’s ban on cryptocurrency activity last September, all Bitcoin trading platforms in the country were shut down. In turn, China lost their prominent Bitcoin trading volume. However, this has stimulated all OTC markets significantly.
A Chinese authority, known as the National Committee of Experts on Internet Financial Security Technology, recently released a report regarding the OTC cryptocurrency market in China. The committee was formed in August 2016 by the Ministry of Industry and Information Technology. According to the report, the committee detected several bitcoin transactions which were conducted in CNY via the National Internet Financial Risk Analysis Technology Platform.
The report gives an explanation of the two different kinds of cryptocurrency trading: intraday and OTC. The report states that OTC provides freedom to the user as it requires no fixed location, membership status, or regulatory compliance. Instead, the transactions are conducted on a peer-to-peer basis which is negotiated privately by the involved parties.
Several finance tools have made P2P transactions more convenient, such as Localbitcoins. However, the report noted that users were utilizing apps such as QQ, Wechat, and Telegram in order to negotiate and orchestrate transactions. Once the parties reached an agreement, payment was made using either bank transfers, gift card purchases, or cash remittance.
According to the report, following the strict regulatory policies regarding cryptocurrency that were introduced in September, most P2P and OTC trading platforms were either shut down or ceased to have the support of China-based users. However, OTC exchanges such as Localbitcoin, Paxful, Coincola, and Bitcoinworld, have made it easy for Chinese users to stay in the market while bypassing detection.
The report analyzed data collected from Localbitcoin and Paxful. While the trading volumes remained relatively small, there was a notable increase in turnover since June 2017. The report concludes that the transaction size increased significantly since June. In the last year, OTC Bitcoin trading has spiked up from 5% to 20%. While intraday trading has declined significantly ever since August and nosedived during September.