From an analysis conducted by Chainalysis Inc, it emerges that China, despite its official ban on crypto trading, is now the territory with the most liquidity in the market thanks to the explosion of over-the-counter crypto trading and the use of the Tether (USDT) stablecoin.
According to the analysis, the results are described as follows:
“About 40% of the top-50 crypto exchanges in terms of Bitcoin on-chain activity are located in the Asia-Pacific region, according to Chainalysis. In the first half of 2019, these exchanges accounted for 35% of all Bitcoin received. The region’s exchanges also dominate the trading in options and futures, with nearly 90% of the 2.36 billion contracts traded globally”.
In 2017, immediately after the Chinese government had placed the ban on the exchange of yuan for crypto, the Tether (USDT) stablecoin had already dominated the entire scenario.
Since 2018, in fact, many Chinese would have traded their yuan for Tether through legal and peer-to-peer exchanges and the so-called over-the-counter trading platforms.
Not by chance, to date, it seems that the stablecoin of Bitfinex has been used in China for 99% of the trades with bitcoin (BTC), whereas in countries like Japan and Korea the direct exchange between fiat and crypto still dominates.
The Chainalysis researcher also points out that in 2019 Tether has become the most used crypto in the world, surpassing even bitcoin.
As a result, the Chinese crypto ban, according to the Chainalysis report, is not stopping the crypto market in the country, but rather it is promoting the use of digital currencies such as USDT and legal exchanges such as over-the-counter trading platforms.
This is an invitation to crypto market players not to divert attention away from China. Just last week, in fact, The People’s Bank of China (PBoC) published an announcement aimed at looking for experts to work on the issuance of the Chinese state currency.