In the wake of the Chinese government’s all out ban and strict legislation on cryptocurrency exchanges, trading and Initial Coin Offerings (ICOs), investors as well as users look to have found a bypass over these barriers. The ban which extended to website blocks, ban on crypto promotional activities and other restrictions had surprised many especially as the government has continued to urge investors to utilize Distributed Ledger Technology(DLT/Blockchain) in research and development. That said, the crypto community and its institutions seem a great way ahead of government restrictions as it proves impossible to totally shut down trading.
Over the past weeks, media reports had stated that the authorities were beefing up controls and blocking all access to about 124 foreign crypto exchanges that provide trading services to Chinese investors. However in a counter move, investors and nationals are said to have employed the use of virtual private networks (VPNs) to access these foreign exchanges and utility of leveraging Tether (USDT) for exchanging their crypt-coins to fiat and vice versa.
The move by the Chinese authorities has proven inconsequential, as exchanges have now also changed domain names which have been banned to new domain IDs under foreign identities that allow them trade to the locals.
According to a foreign exchange source, Chinese regulators have the “technical ability to shut down VPNs but at this time there are no restrictions on VPN use in China which is a loophole and tool for investors to access these foreign exchanges.” Another source however states that even in a bid to shut down VPNs, the authorities would require conversations and permissions from different industry stakeholders before reaching a consensus on configuring the Great Chinese firewall, which is in itself a very lengthy process.
From industry experts opinion, the outreach of this ban is porous as they specify that it would be difficult for regulators to completely block access to these trading platforms as their severs remain outside China’s borders; also crypto transactions are conducted peer-to-peer and stay decentralized hence a complete restriction will be impossible. They further opine that this rigid regulation by the Chinese authorities could decrease trading interest among its new investors and reduce influx to foreign exchange platforms.
In same vein, the move by the Chinese government which it refers to as a measure to ‘ensure security and stability of its financial system’ has now been adopted by a few of its home grown organisations like messaging app WeChat and payment company Alipay; with both companies looking to stay in government favour and avoid counter measures against them as they have all taken measures from blocking cryptocurrency and blockchain accounts, to prohibiting cryptocurrency transactions on their platforms.
Do you think the Chinese ban is in it public interest or part of its dominerring move to stay in control of wealth and financial powers; as many see its recent fiat loans as a Trojan horse? Or as the common saying goes “Anything China bans,Invest in it.” Share your thoughts
Opinions expressed are solely of the author not a general view of the BTC.ng team