China is still in the top of the cryptocurrency market

 Despite the government's ban on mining and trading of cryptocurrencies, China remains the top active market for cryptocurrencies.

ccording to data from blockchain research firm Chainalysis, China recorded more than $220 billion in cryptocurrency transactions from June 2021 to May 2022, ranking first in East Asia and fourth in the world. This number is higher than places that have not banned this currency such as Korea and Japan.

China started phasing out cryptocurrency trading in 2013 and banned Bitcoin mining in May last year. However, related activities still take place silently.

Coins illustrating popular cryptocurrencies taken in June 2021. Photo: Reuters
Coins illustrating popular cryptocurrencies taken in June 2021. Photo: Reuters

"Many Chinese people have long used virtual private networks (VPNs) to bypass the Great Firewall and make transactions," said Zennon Kapron, founder of fintech consulting firm Kapronasia. “Some Bitcoin mining in the country is certainly continuing, albeit on a smaller scale than before.”

Despite its high ranking, the total number of transactions in China fell by 31% year-on-year. "The biggest reason for this is the bans from the Chinese government," the Chainalysis report states.

Beijing has long viewed cryptocurrencies like Bitcoin as a threat to financial security and capital controls. In September, the Central Bank of China announced victory in blocking cryptocurrency transactions and mining. However, according to SCMP, the latest data from Chainalysis shows that the ban has not been effective or the enforcement is lax.

Chainalysis's September 2022 Global Crypto Acceptance Index figures also show China as 10th in terms of crypto activities, up from 13th place last year, but down from last year's 13th place. Wednesday 2020.

Yip Ki-nang, a manager at Hong Kong-based blockchain consulting firm QuantBlock, believes that crypto traders in China have managed to circumvent the law through activities on the metaverse and NFT. These people will trade items in the virtual universe or NFT instead of tokens like Bitcoin, Ethereum to bypass the ban.

In May, according to data from Cambridge University, China also unexpectedly "re-emerged" to become one of the second largest Bitcoin mining centers globally. At that time, the data showed that the country accounted for 20% of the total computing power (hashrate) of Bitcoin, even though it had previously reached 0%.

According to CoinDesk, the hash rate recovery shows that many Bitcoin miners in the country are still secretly mining cryptocurrencies. But instead of going public as before, they find ways to circumvent the law by hiding their IP addresses on proxy servers, using private grid electricity, and even building underground mines in remote areas to avoid detection. .

In April 2021, China accounted for 46% of the global Bitcoin network activity, while the US came in second with 16.8%. The ban a month later brought cryptocurrency mining to an almost immediate halt. The rigs of "buffalo plow" are transported by diggers all over the world, mostly through the US and Kazakhstan.
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