In 2021, the government of the People’s Republic of China introduced a ban on cryptocurrencies. Moreover, citizens are forbidden to keep it and use it to pay for any services, invest.

Miners relocated to Russia and Kazakhstan, investors opened accounts in the USA. But do all the inhabitants of the Celestial Empire unconditionally adhere to Chinese law, abandoning crypto assets?

Reporters from the South China Morning Post conducted an anonymous survey. What results he was able to identify and whether the ban on the use of crypto assets turned out to be effective – we will understand.

Survey results show that investors from China continue to work with BTC and altcoins

 

Indeed, despite the global ban, citizens continue to use digital assets. To do this, they use workarounds. Non-compliance with the law is due to the fact that Bitcoin turned out to be the most profitable instrument of 2021.

According to the survey, Chinese people use the Huobi and Binance exchanges for trading. They get access to them using a VPN and a proxy.

How do the Chinese get around the ban on cryptocurrencies and continue trading?  Photo: Rafael Classen rcphotostock.com / PexelsHow do the Chinese get around the ban on cryptocurrencies and continue trading? Photo: Rafael Classen rcphotostock.com / Pexels

How do the Chinese get around the ban on cryptocurrencies and continue trading?

Crypto exchanges are banned in China. However, the locals found a way around. To access they use:

  • spoofed IP addresses;
  • foreign postal systems;
  • decentralized platforms;
  • purchased accounts and/or documents for verification.

While the PRC authorities, due to the scale, cannot detect such activity, citizens continue to profit from trading, for example: bitcoin, ethereum and other altcoins.

In fact, the ban only helped to get rid of miners in the country, but not from investors and traders. Cryptocurrency has become too entrenched in the lives of many citizens, so they are even willing to risk their freedom and money in order to be able to use it.

Currently, there is a frenzied demand for verified accounts of cryptocurrency exchanges. Also included in the price are paid VPN services and other tools to bypass blocking.

 

Cryptocurrency ban in other countries in 2022

 

Along with the rapid growth in the price and popularity of the leading coins, the attention from regulatory authorities has also increased. Let’s analyze which countries can restrict the use of digital “gold” and how this may affect the cryptocurrency market.

 

The alleged ban on the crypto market in the Russian Federation

 

On the eve of the New Year, the Central Bank announced that crypto assets pose a threat to the stable operation of the financial system of the Russian Federation. The regulatory body has already begun to negotiate with experts and other market participants regarding the introduction of new rules, adaptation of legislation.

If the ban comes into force, it will only apply to the acquisition of new crypto assets, and not to existing ones. To date, the regulator shows a complete rejection.

However, Anatoly Aksakov, chairman of the Duma committee on the financial market, said: “There are two opinions in the State Duma on this matter: both a total ban and legalization. Ultimately, 2022 should be decisive for the issue of legalizing the crypto market in the Russian Federation.”

In addition, Russians with cryptocurrencies are advised to prepare for the worst-case scenario and declare assets. This will help in the future to prove that the coins were received before the adoption of the law on restrictions, which will allow you to legally dispose of your own property.

Cryptocurrency bans in Germany

 

There are currently no bans. Individuals can buy and store cryptocurrencies. On the other hand, there are some restrictions aimed at large players in the market.

Funds and investment holdings are allowed to invest up to 20% of available funds in digital assets. Analysts estimate that this could bring up to $415 billion into the market.

What other countries are against cryptocurrencies?

At the moment, digital assets are banned not only in China. They cannot be used in Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia and Bangladesh. In addition, 41 countries have introduced indirect restrictions on the use of coins with the possibility of tightening them in the future.

Country regulators fear for financial stability and are trying to limit digital assets. However, cryptocurrencies provide many underestimated opportunities for states that El Salvador is already using. As a result, the country attracts significant additional funds to the budget. Despite the partial negative attitude towards the cryptocurrency market, it continues to grow. Moreover, experts predict a bitcoin exchange rate in the region of $500,000 within 5 years. If this forecast is realized, countries prohibiting cryptocurrencies may change their minds.

Why is the ban on cryptocurrencies ineffective?

 

Using the example of China, you can see that most of the inhabitants, of course, have not abandoned the cryptocurrency. Moreover, even under the threat of the introduced criminal liability. Instead, they found ways to bypass the lock while continuing to use their digital assets.

After the official ban, only mining and investment companies left the country. Since then, the PRC has lost millions of dollars that did not make it to the budget. According to some analysts, China may change its mind in the near future. As a result, conditions that are comfortable for cryptocurrency firms can be offered.

Having studied the experience of the Middle Kingdom, other countries may reconsider their attitude towards crypto assets. The possible introduction of only some restrictions for large funds is a more adequate solution.

Why investors choose BTC even after the ban

The answer is simple and banal – money. Because bitcoin turned out to be one of the most profitable investment instruments, bringing over 75% of the profit over the past year. Real estate came in second, followed by US and Russian stocks.

The most unprofitable investments were euro, gold and OFZ. Although these tools are often recommended for the preservation and growth of capital. Now they are not always able to cover even inflation.

Crypto assets allow you to get high profitability: the main thing is a competent analysis. More and more new players continue to enter the market. That is, in other words, growth in the next few years is actually guaranteed (not counting corrections and drawdowns).

Output

 

Of course, cryptocurrency will completely change the financial system in the future. As a result, it will make transnational transfers fast, cheap and without the mandatory participation of third parties.

Despite the ban on cryptocurrency, sooner or later it will inevitably receive recognition at the state levels. No one yet knows in what form this will happen: whether digital analogues of national currencies will appear, whether one common coin will be recognized, or whether blockchain technologies will somehow adapt to the realities of the new world