Home Bitcoin News Bitcoin Report says $50 billion plus cryptocurrency has flown out of China in...

Report says $50 billion plus cryptocurrency has flown out of China in past 12 months

  • A recent report by Chainalysis has revealed that approximately $50 billion worth of cryptocurrency assets have left China in the past 12 months.
  • As the Chainanalysis report points, this has been primarily responsible for the massive outflow of cryptocurrency from the country.

In 2017, the Chinese government and the People’s Bank of China (PBoC) had banned domestic cryptocurrency exchange operations. However, research reports indicate that despite the ban, citizens have been accessing digital assets through OTC platforms and offshore exchanges.

While there does exist a capping issued by the Chinese government on the amount of capital citizens are allowed to transfer from the country, reality tells a different story. A recent report by Chainalysis has revealed that approximately $50 billion worth of cryptocurrency assets have left China in the past 12 months.

China’s economy has been adversely affected due to escalating trade wars with the USA and devaluation of the yuan at different points. As the Chainanalysis report points, this has been primarily responsible for the massive outflow of cryptocurrency from the country.

East Asia: The new crypto hub

Excerpts from the report further say that East Asia is the world’s largest, ‘robust professional’ cryptocurrency market, accounting for about 31% of all crypto transactions in the last 12 months. Chinese citizens have specifically utilized the US dollar-pegged Tether (USDT) for capital flight, as well as other purposes, which represents 93% of all stablecoin value moved by addresses from East Asia. This could partly be triggered by the Chinese government’s decision in 2017 to ban direct exchanges of yuan for cryptocurrency.

The crypto analysis firm also emphasized that with China controlling about 65% of Bitcoin’s global hashrate, the country’s mining and capital flight have contributed to East Asia’s trading volume to a large extent.

Beginning of a new crypto era

Stablecoins offer several advantages for capital flight. With their values linked to fiat currencies, investors can not only make good profits in exchange of fiat money, but also remain sure about the stability it offers. As Paolo Ardoino, Tether’s CTO, remarked in the report, it is the instant settlement, deep liquidity, cheaper fees and relatively stable price associated with Tethers which has generated a wide array of opportunities for crypto traders.

Chainalysis head of research Kim Grauer too, has opined that investors are increasingly using a stablecoin like Tether for international transactions. For instance, Chinese crypto firms conducting business in Latin America are increasingly preferring Bitcoin and Tether for payment purposes.

Recently, Crypto analyst and RT TV presenter Max Keiser tweeted that wealthy Chinese “are doing a runner” and that the outflow may herald the beginning of the end of the nation-state era.

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