China cryptocurrency traders may have perfected ways of bypassing the nation’s ban on digital currencies. Experts assert that inasmuch as transactions remain decentralized and peer-to-peer, it would be next to impossible to completely block traders.
VPNs and Tether: Traders’ Rescuers
Apart from the unlawful cryptocurrency exchanges currently ongoing, reports from sources say that retail investors equally change their fiat to stablecoin Tether. This enables them to directly make an exchange with cryptocurrency wallets.
The plan is perfected by ensuring that every online action is done with a Virtual Private Network (VPN). This ensures that the identity of traders are undetected and they can evade restrictions.
As it is, the Chinese government is yet to take any decisive action such as blocking VPNs. However, a well-informed source speaking on the condition of anonymity said:
Chinese regulators definitely have the technical ability to shut down VPNs… However, traditionally it takes numerous conversations with different stakeholders to reach a consensus on configuring a firewall, which lengthens the process.
Tencent and some other companies have, however, vowed to either ban or block accounts trading with cryptocurrency. Nevertheless, it is yet to be known how Tencent hopes to identify these accounts. Perhaps, it has put measures in place that are yet to be revealed. But if not, Tencent may just be issuing an empty threat.
Exchange In Cryptocurrency Still Continues
Not minding the harsh stance of the Chinese government on crypto-related activities, many locals appear to be undeterred. In fact, instead of being cautious, citizens keep establishing abroad even with fierce competition.
As China’s way of curbing this trend, it is now blocking access to offshore exchanges. It has succeeded in doing this to 124 of such and this has led to a 33 percent in trading volumes. South China Morning Post says that 7 popular exchanges have been worst hit by this move.
Despite this move by the government, players in the China cryptocurrency industry appear to be unmoved. Many believe that so long transactions continue to be peer-to-peer and decentralized, it would be hard for regulators to get them off the market.
The chief operating officer of a Hong Kong-based cryptocurrency, Terence Tsang said only small exchanges have reasons to fear. He said the threat is more or less targeted at foreign companies working in China. These exchanges had claimed they are foreign but are in actual fact resident in China.
The question on everyone’s mind is “For how long will this evasion continue?” It is expected that the Chinese government would take more strict actions in coming days. But then, judging by the relentless effort of players in this field, they may still come out with another evading tactic.