An October court ruling in the Shenzhen Court of International Arbitration outlined cryptocurrencies as a protected asset class. This ruling spurred speculation that Beijing had lifted the cryptocurrency ban as Bitcoin and other coins could not be used to pay for goods and services – mainly at hotels by most reports coming out of the mainland. However, several publications misinterpreted this ruling to mean that exchange trading was now allowed. Unfortunately, this is not the case.
All that said, cryptocurrency is thriving in China under the ban. OTC platform and Hong Kong-based exchanges have made it nearly impossible for Xi Jingping’s government.
“ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions,” the report read.
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According to executives speaking on Twitter, the ban on crypto trading by the government was only targeted at exchanges within mainland China, which pretended to be overseas companies but operated inside the country. He emphasized that as for OTC platforms and exchanges in overseas markets like Hong Kong, the government of China has not effectively enforced strict policies to prevent trading.
In order to fully ban cryptocurrency trading, the Chinese Government would have to ban wire transfers from the mainland to Hong Kong and even outlaw VPN. Cryptocurrency trading activity in China has increased so rapidly in the past nine months to a point in which companies have started to raise millions of dollars in seed funding to provide insurance and security services to digital asset OTC trading platforms in the country.
According to the latest media reports, a newly opened hotel announced that it is accepting payments in Ether. Not just that, China’s oldest Tech Publication also has come out and said that it would be accepting bitcoin’s for subscriptions.