While crypto users in Mainland China still find ways to trade, major exchanges are preparing for the disconnection of service for Chinese users at the end the year.
It is widely believed that 2021 is the end of crypto investors and users based in China. After a renewed ban earlier in the year on everything crypto trading to mining related, exchanges that historically had large numbers Chinese users, such as Binance or Huobi said that they will end service for these users by December.
Some have highlighted the market’s imminent deadline as a risk to the market. For instance, Colin Wu , a Chinese-focused journalist focusing on crypto, wrote that market fluctuations should be “observed” since Binance, Huobi, and MEXC all suspend support for Chinese users.
According to unnamed sources, the South China Morning Post spoke with, crypto users in Mainland China have found ways to circumvent restrictions despite the imminent deadline.
One Chinese crypto investor said that users can access foreign cryptocurrency exchanges by using a virtual private networking (VPN) to bypass China’s ‘Great Firewall. The same source also stated that it was possible to sign up for a foreign email service, and choose a country without an identity system.
According to another Chinese crypto investor, new solutions are most likely to emerge for Chinese crypto traders.
Many Chinese exchanges banned deposits of Chinese Yuan in 2017 and allowed only withdrawals. This caused “temporary chaos” in the domestic market, according to the investor. The situation changed when market veterans created private over-the counter (OTC) groups to facilitate trading between crypto and fiat currencies, according to the source.
A third source says that options for crypto beginners are getting more restricted.
Trader can choose to trade on decentralized exchanges (DEXes), which don’t require know-your-customer checks. However, it is becoming more difficult to move from Chinese Yuan to crypto, according to the source.
Many of China’s biggest exchanges reacted to the previous ban on crypto in 2017, moving their headquarters from the Chinese Mainland to Hong Kong and Singapore.
Peer-to-peer markets and OTC markets are still available for users in China. This makes it easy for them to continue participating in the crypto economy. Despite Beijing seeming more determined to ban crypto-related activities, it remains open to question what solutions will be found for Chinese crypto users.