Binance’s Presence in China: How and Why?
According to reports, Binance, the largest cryptocurrency exchange, has a significant presence in China, despite the country’s ban on crypto trading activities. Here are the key points:
– Binance has around 900,000 active users in China, making it a major market for the exchange.
– Other countries such as South Korea, Turkey, Vietnam, and the British Virgin Islands also rank high as Binance markets.
– In May 2023, Binance recorded over $90 billion worth of spot and futures trading, accounting for 20% of the global volume.
Possible Reasons for Binance’s Operations in China
The report suggests several factors that may contribute to Binance’s continued operation in China:
– Binance collaborates with Chinese law enforcement to detect potential criminal activities.
– The use of Virtual Private Networks (VPNs) may allow Chinese users to access the exchange.
– Binance actively engages in peer-to-peer market trading with Yuan-denominated pairs.
China’s History of Crypto Bans
China has a track record of banning cryptocurrency activities:
– In 2009, China banned trading virtual currencies for real-world goods and services.
– In 2013, they prohibited banks from processing BTC transactions, causing a significant price decline.
– Alibaba, a major e-commerce company, also banned crypto transactions in 2014.
– In 2017, China banned cryptocurrency exchanges and ICOs.
– Bitcoin mining was outlawed in 2019, followed by stricter regulations and measures in March 2020.
Difficulties in Implementing Bans
Despite restrictions, critics argue that China allows crypto activity to continue due to the complexity of enforcing bans:
– As more people adopt crypto and use VPNs, enforcing bans becomes challenging.
– The ban’s intention seems to be slowing down crypto growth rather than eliminating it.
– China engages in significant futures trading on Binance, with monthly volumes reaching $80.6 billion.
Hot Take: Will China Ever Fully Ban Crypto?
While China has a history of implementing crypto bans, the growing popularity and usage of cryptocurrencies, coupled with the difficulties in enforcing bans, make it unlikely for China to fully ban crypto in the future. The country seems to want to regulate and control crypto rather than eliminate it completely, as evidenced by Binance’s continued presence and the substantial trading volumes on the exchange.